Categories: Bitcoin Latest News

Bitcoin Layer 2 Foundations Should Buy Bitcoin For Their Treasuries

I’ve been thinking about this a lot lately: Bitcoin Layer 2 foundations need to start holding bitcoin in their treasuries. It makes too much sense for them not to.

And apparently I’m not the only one.

As someone who’s watched this space evolve, let me explain why Bitcoin Layer 2 foundations should listen to Molly and I.

For years, bitcoin was known as “digital rock”—a solid store of value but not much else. But now with the explosion of Bitcoin Layer 2s, bitcoin is becoming a “programmable rock.” These layers are adding functionalities like smart contracts and scaling solutions, making bitcoin more versatile than ever.

But here’s the thing: these projects raise millions of dollars from VCs and investors, and most of that money ends up sitting in fiat currencies like USD. That’s a huge mistake.

Why? Because fiat is a melting ice cube. Every year, it loses 5-10% of its value due to inflation. The longer you hold it, the less it’s worth. On the other hand, bitcoin has a Compound Annual Growth Rate (CAGR) of around 70%. If these foundations held their treasury in bitcoin instead of fiat, their runway wouldn’t just stay the same—it would grow.

Imagine having 70% more resources each year to fund developers, grants, and projects. That’s the kind of edge that could make or break a Layer 2 ecosystem.

Okay, okay, I get it — Bitcoin is volatile, and these foundations need some stability. Because of this, keeping 3 to 4 years of runway in fiat makes sense. It would help to cover short-term needs. But the rest? It should be in bitcoin. Over the long run, this strategy could double or even triple the runway of these foundations, giving them the time and resources they need to succeed.

There’s a precedent for this too. Remember EOS? They raised $4.2 billion in 2018 and reportedly bought 164,000 bitcoin with it. Today, that bitcoin is worth around $16 billion—even though EOS itself fell off the map. Now, imagine if Bitcoin Layer 2 foundations did the same but actually used their bitcoin to grow and sustain their ecosystem. The potential is massive.

At the end of the day, these foundations are building on Bitcoin. They believe in its future, so why not hold it in their treasuries? Bitcoin is the best store of value out there. If you’re running a Bitcoin Layer 2 foundation, stop holding depreciating fiat, and start holding bitcoin. It’s not just a smart move—it’s the move.

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Read More[#item_full_content]Bitcoin Magazine – Bitcoin News, Articles and Expert Insights

Recent Posts

Bitcoin and Ether bears get decimated amid ‘squeeze-led’ rally and Musk’s X wants to pay creators in stablecoins: Crypto week in 5 stories

Bitcoin and crypto staged their strongest rally in months as Treasury intervention, regulatory moves and…

2 days ago

How a Treasury buyback tweak helped bitcoin surge 25% to nearly $80,000 in days

Treasury buybacks are not QE, analysts said, but the move helped pull long-term yields off…

2 days ago

Zcash jumps 48% to over $800 as Grayscale spot ETF push adds to ‘next bitcoin’ buzz

ZEC traded above its January 2018 peak as futures volume hit billions of dollars and…

2 days ago

Smart Money Helping Support Bitcoin Rebound, Says Pantera Capital

Bitcoin Magazine Smart Money Helping Support Bitcoin Rebound, Says Pantera Capital American investment firm Pantera…

2 days ago

Legendary Investor Ray Dalio Touts Bitcoin — With Gold — To Hedge Against Incoming Debt Crisis

Bitcoin Magazine Legendary Investor Ray Dalio Touts Bitcoin — With Gold — To Hedge Against…

2 days ago

Hashdex Liquidates DEFI As First US Spot Bitcoin ETF Closure Arrives

Hashdex has begun liquidating its Hashdex Bitcoin ETF, ticker DEFI, marking the first closure of…

2 days ago