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Elena R
Elena R
Author
Elena is an expert in technical analysis and risk management in cryptocurrency market. She has 10+year experience in writing - accordingly she is avid journalists with a passion towards researching new insights coming into crypto erena.
- Dec 11, 2024 05:45 UTC
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Alabama Eyes Strategic Bitcoin Reserve to Combat Inflation
Several states, including Alabama, are considering Bitcoin as a strategic reserve to combat inflation and capitalize on its growth potential.
Spot Bitcoin ETF approvals and increased demand from whales and institutional investors are driving Bitcoin's price.
Experts predict a significant price surge for Bitcoin due to limited supply, increasing demand, and potential government purchases.
The idea of adopting Bitcoin (BTC) at the state level is gaining traction, with Alabama emerging as a potential leader. This follows recent moves by Russian officials to embrace Bitcoin and the re-election of Donald Trump, who has been a strong supporter of a U.S. strategic Bitcoin reserve.
Federal Reserve officials have compared Bitcoin to “digital gold,” highlighting its limited supply of 21 million coins as a key feature. The approval of spot Bitcoin ETFs has further validated Bitcoin’s role in traditional finance, with institutional investors driving significant demand.
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Alabama’s Push for a Bitcoin Strategy
Alabama could be the next state to embrace Bitcoin as a strategic reserve. State Auditor Andrew Sorrell advocates for the plan, emphasizing its potential to protect residents from inflation and the economic risks of global de-dollarization.
“A well-balanced portfolio should include exposure to many different types of asset classes. As of now, crypto is a $3 trillion asset class that the state has zero exposure to. It is also the most rapidly growing asset class, with the greatest potential for price appreciation. Investing in Treasuries and bonds certainly has its place, but earning a 4% yield while inflation is 2.7% is barely breaking even,”
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Rising Demand, Shrinking Supply
Dennis Porter, co-founder of Satoshi Action Fund, noted that state adoption of Bitcoin reserves could worsen the current supply shortage. Bitcoin held on centralized exchanges has dropped to a multi-year low of 2.26 million coins, while demand from institutional investors and whales continues to grow.
Future of Bitcoin
The Trump administration is reportedly planning to acquire 1 million Bitcoin over the next five years. Such large purchases could drastically reduce the circulating supply and trigger a prolonged bull market.
Eric Trump, executive vice president of the Trump Organization, recently made a bold prediction: Bitcoin’s price could reach $1 million in the near future. This follows Bitcoin’s historic breakthrough of $100,000, a milestone that has energized the crypto market.
Bitcoin’s role as a hedge against uncertainty grows stronger every day.
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