Bitcoin has soared to $106,533 after President-elect Donald Trump hinted at creating a U.S. Bitcoin strategic reserve during a CNBC interview. The cryptocurrency, which recently traded at $105,688, has risen by over 50% since the November 5 election. Ether, too, has gained traction, climbing 3% to $4,014. On-chain data indicates that nearly 27,000 Bitcoins—worth $2.8 billion—were withdrawn from major exchanges over the weekend, reducing supply and fueling the price rally.
Trump’s ambitious plan to establish America’s dominance in the crypto sector has invigorated investors. His goal, focused on outpacing competitors like China, highlights the strategic importance of Bitcoin in the global financial race.
To support his agenda, Trump has tapped crypto-friendly figures for pivotal roles: David Sacks as the White House AI and Crypto Czar and Paul Atkins to lead the SEC. These appointments hint at a significant policy shift toward mainstream crypto adoption in the U.S.
Trump’s Bitcoin reserve proposal could spark a “Bitcoin cold war,” as global powers like Russia explore the cryptocurrency’s potential as a geopolitical tool. Russian President Vladimir Putin has emphasized Bitcoin’s resilience against sanctions and its appeal as a hedge against the US dollar.
The idea of a Bitcoin reserve has already gained traction among corporations. MicroStrategy, a leading advocate, now holds 423,650 BTC valued at $43.6 billion, demonstrating Bitcoin’s viability as a modern reserve asset. Tesla’s adoption of Bitcoin further supports its potential as a hedge against economic uncertainties, reinforcing the case for Trump’s proposal.
Trump’s reserve plan mirrors his earlier statement at the Bitcoin 2024 Conference, where he predicted Bitcoin’s market cap could rival gold’s $16 trillion. Supporting this vision, Republican Senator Cynthia Lummis introduced the BITCOIN Act, proposing that the U.S. acquire 1 million Bitcoins over five years to help address the $35 trillion national debt.
However, realizing this plan requires Congressional approval for funding, clear guidelines from the SEC and Treasury, and Federal Reserve cooperation. In the short term, Strike CEO Jack Mallers suggests Trump could issue an executive order on day one, designating Bitcoin as a U.S. reserve asset.
While this wouldn’t mean purchasing 1 million BTC immediately, Mallers describes it as a “significant position” that could redefine Bitcoin’s role in the U.S. economy.
Skeptics Weigh In
Critics caution that integrating Bitcoin into national reserves might conflict with its decentralized nature. Additionally, price volatility remains a key concern. While fluctuations are expected as the plan develops, the potential long-term benefits could outweigh these challenges.
Market experts predict Trump’s plans could dramatically impact Bitcoin’s value. Perianne Boring, founder of the Digital Chamber, estimates Bitcoin could reach $800,000 by next year, creating a $15 trillion market cap. She highlighted Bitcoin’s fixed supply as a key driver: “The sky is the limit if Trump’s proposals take shape.”
Notably, there are speculations 0.25% interest rate cut from the U.S. Federal Reserve on December 18 could further boost Bitcoin’s momentum, according to analysts.
Trump’s Bitcoin reserve could spark a “Bitcoin cold war” with countries like Russia exploring Bitcoin’s geopolitical potential and its role against sanctions.
Bitcoin surged to $106,533 after Trump hinted at a U.S. Bitcoin reserve, rising by over 50% since the November 5 election.
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