How Trump’s Strategic Reserve Proposal is Shaking the Crypto Market
Bitcoin’s rise to $106,533 reflects strong market momentum as President-elect Donald Trump hints at groundbreaking plans to build a U.S. strategic reserve of Bitcoin during his term. interview In partnership with CNBC. The cryptocurrency’s recent price was $105,688, up more than 50% since the Nov. 5 election. Elsewhere, Ethereum rose about 3% to $4,014. On Chain data showed that nearly 27,000 Bitcoin worth $2.8 billion were withdrawn from major exchanges over the weekend, potentially pushing prices higher as supply dwindles.
Trump’s ultimate vision to secure U.S. dominance in the cryptocurrency space before others take over, especially against competitors like China, is alarming and bolsters investor confidence. Additionally, he has chosen crypto-friendly figures, including David Sacks as White House AI and crypto czar and Paul Atkins as chairman of the U.S. Securities and Exchange Commission, which Signaling a shift in policy towards mainstream adoption.
The move is a green flag for global powers, including Russia, to explore Bitcoin’s potential to address geopolitical challenges and heralds the possibility of a “Bitcoin Cold War.” President Vladimir Putin is exploring alternatives to the dollar. Putin has recently highlighted Bitcoin’s ability to withstand restrictions, highlighting its appeal as a hedge against traditional currencies.
Bitcoin reserve plans have gained traction as companies like MicroStrategy and Tesla adopt Bitcoin as a hedge against economic risk. MicroStrategy currently holds 423,650 BTC, worth $43.6 billion, demonstrating Bitcoin’s potential as a modern reserve asset.
Trump’s proposal for a Bitcoin reserve echoes his earlier pledge at the Bitcoin 2024 conference, where he predicted that Bitcoin’s market capitalization could rival gold’s $16 trillion. In order to support this vision, Republican Senator Cynthia Lummis proposed the “Bitcoin Act”, advocating that the United States purchase 1 million Bitcoins within five years to solve the US$35 trillion national debt.
Critics have mixed feelings about Trump’s Bitcoin plan
Trump will need funding approval from Congress, clear SEC and Treasury guidance and cooperation from the Federal Reserve to succeed. Meanwhile, Strike CEO Jack Mallers believes that Donald Trump may issue an executive order on day one to make Bitcoin a U.S. reserve asset. While this does not involve the purchase of 1 million Bitcoins, Mallers called it an “important position” that could reshape Bitcoin’s role in the U.S. economy.
Others believe that including Bitcoin in national reserves could go against its decentralized nature. At the same time, the plan anticipates price fluctuations.
Bitcoin current situation
Market experts predict that Trump’s plan could significantly impact the value of Bitcoin. Perianne Boring, founder of Digital Chamber, estimates that the price of Bitcoin could reach $800,000 by next year, creating a market capitalization of $15 trillion. She highlighted Bitcoin’s fixed supply as a key driver: “If Trump’s proposal takes shape, the sky is the limit.”
It is worth noting that analysts said there is speculation that the Federal Reserve’s 0.25% interest rate cut on December 18 may further boost Bitcoin’s momentum.
