Cryptocurrencies are celebrating. The bullish trend is clear. D.Trump won the presidential elections in the USA, and the Republicans are close to taking control of Congress. Control over the Senate and the House can ensure the smooth implementation of crypto-friendly regulations.
The positive message built around Bitcoin and the blockchain industry was a crucial part of Trump’s presidential campaign. Since the Republican leader’s win, the price of Bitcoin has risen by over 20%. This favorable turn of events for the industry is surprising even to the biggest optimists. It also paves the way for building expectations around the next growth catalysts.
The cryptocurrency market loves speculation and hypothetical scenarios. And this time there is plenty to dream about, as the Republicans’ initiatives point to the desire to create a strategic Bitcoin reserve. Will the USA accumulate and ‘scoop up from the market’ over 1 million Bitcoins?
Bitcoin is on the right track to cost 100 thousand USD. The United States might invest in this cryptocurrency to reduce its debt. They already hold about 200,000 Bitcoins, mostly seized from criminals.
“During the election campaign, D.Trump claimed that the United States needs to adopt cryptocurrencies and be the global leader in this before other countries do,” says Michał Stajniak, deputy director of the Analysis Department at XTB. “Elon Musk’s new role, who is an icon of the cryptocurrency market, could also be important.”
Will Bitcoin soon become an important reserve asset in the United States? Bitcoin is now reaching levels close to 90 thousand dollars, although it was trading below 70 thousand dollars pre-election. If we compare this to the lowest level this year, below 40 thousand dollars, the increase seems truly spectacular. Donald Trump mentioned that he would like to include Bitcoin in Strategic Reserves.
“Before the US presidential elections, ETF funds hardly bought any Bitcoins, fearing that if Trump lost, additional legal restrictions would be introduced regarding cryptocurrencies,” comments an XTB expert. “Upon announcement of election results, they bought a lot, rushing into cryptocurrencies.”
The Bitcoin Act, presented this year by Republican Senator Synthia Lummis, proposes buying 1 million Bitcoins over five years, which would reduce the US debt spiral. The US debt reached 36 trillion dollars this year. Meanwhile, 1 million Bitcoins constitute 5% of the entire supply of this cryptocurrency. The potential consequences of such a decision would be a significant increase in its price and a strengthening of Bitcoin’s credibility.
The mentioned million Bitcoins would currently be worth about 90 billion USD. It’s quite a lot, considering the current US gold reserves, which are over 8 thousand tons and are currently worth about 800 billion USD. The United States currently holds about 200 thousand Bitcoins, mainly seized from criminals. This theoretically makes the USA the country with the largest cryptocurrency holdings, with China next in line.
“Strategic Bitcoin reserves could play a role similar to existing currency reserves and gold reserves under the jurisdiction of the US Central Bank,” comments an XTB expert.
Bitcoin is not bothered by the strong US dollar, which is gaining due to the so-called Trump Trade. However, in the long term, the increasing public debt in the USA is not positive for the dollar, but it is good for reserve assets like gold and Bitcoin.
Although gold is correcting after Trump’s victory, Bitcoin is on the right track to reach the level of 100 thousand USD. In terms of the Polish zloty, one Bitcoin cost over 365 thousand in mid-November, although it was worth less than 300 thousand zloty before the election.
“However, I do not expect the price of Bitcoin to exceed 100 thousand USD this year, even though we are in a period of increased speculation on cryptocurrencies, and everything is now possible,” summarizes M.Stajniak from XTB. “However, the weakening of the zloty against the dollar causes the increases on Bitcoin in Polish currency to be even stronger, hence reaching the price of 400 thousand zloty seems all the more just a matter of time. But the warning remains that investing in Bitcoin quickly can lead to significant losses.”
Source: https://managerplus.pl/bitcoin-rosnie-po-zwyciestwie-trumpa-czy-usa-zbuduja-strategiczne-rezerwy-kryptowalut-39520
