A digital asset
investment fund
Viska is an alternative investment fund based in Iceland that invests in digital assets.
Viska is an alternative investment fund based in Iceland that invests in digital assets.
The possibility of a U.S. Bitcoin reserve under the Trump presidency has gained a significant amount of attention. Following Cynthia Lummis's introduction of the Bitcoin Act, a strategic proposal to accumulate Bitcoin over a five-year period, the idea of integrating Bitcoin into the national reserve is no longer hypothetical—it’s becoming a topic of mainstream political and financial discourse.
Image from Bitcoin Nashville 2024
Lummis’ Bitcoin Act outlines a framework for the U.S. to steadily acquire Bitcoin, ultimately amassing approximately 5% of the total Bitcoin supply. This would be a monumental development for Bitcoin, representing a significant portion of the scarce digital asset. In an asset class that we can describe as a "small pond," such a large-scale acquisition would create a significant "splash," further tightening supply and amplifying price impacts.
The U.S. government already holds a significant amount of Bitcoin, primarily from seizures related to criminal investigations. If lawmakers were to pass a measure preventing the sale of these assets and designating them as part of a strategic reserve, it would still represent a substantial shift in policy. While this approach would not require new purchases, it would still be extremely bullish for Bitcoin, as it would signal a strong institutional commitment to the asset.
According to BiTBo, the U.S. government currently holds approximately 207,189 BTC. This would make the U.S. one of the largest holders of the digital asset. Data snapshot is from 20.12.24.
While the markets are buzzing with the potential implications, they have yet to fully price in this possibility. According to Polymarket, there is a 35% probability that a Bitcoin reserve will be established during Trump's presidency—a figure that has been trending upwards since his recent remarks.
Image via Polymarket as of 20.12.24. This data is particularly important because it means that the broader market has yet to price in any implications of the establishment of a BTC reserve.
Since Trump's election victory in November, Bitcoin has rallied over 50%, with its price recently surpassing $107,000 for the first time (on 17.12.24). This surge was bolstered by Trump’s recent comments when questioned by a reporter about the possibility of a strategic Bitcoin reserve, further fueling speculation and market excitement.
Here is an overview of the trajectory of Bitcoin in recent years. 17.12.24 via Reuters
The potential establishment of a U.S. Bitcoin reserve is a landmark development. A reserve of this nature would likely:
Market analysts predict that if the U.S. officially establishes a Bitcoin reserve, Bitcoin’s price could soar to unprecedented levels, with some forecasts exceeding $1.5 trillion in market capitalization.
With Bitcoin’s total supply capped at 21 million, the proposed acquisition of 5% under the Bitcoin Act would represent more than 1 million BTC—an unprecedented move that could redefine supply dynamics. To add, once the BTC is accumulated, the government will be mandated to hold the assets for 20 years. Bitcoin's price, already being on a steep upward trajectory, could see significant and sustained upward pressure if this plan comes to fruition.
According to CryptoQuant, Bitcoin reserves on exchanges are at an all time low. This is before any large purchases from the US government as well.… So one could only imagine what would happen if they went through with making any large purchases.
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