30s Summary

Rumours suggest that Donald Trump may begin his presidential term by creating a Bitcoin Reserve. This follows introductions of Bitcoin-related bills by senators in multiple states, and similar hints from countries like Russia, Germany, and Thailand. The Bitcoin Reserve Act suggests the US government would buy 200,000 BTC annually for five years, securely holding a total of 1 million Bitcoin for at least 20 years. Trump’s possible pro-crypto push, alongside nominations for pro-crypto figures in key financial positions, could signal a ‘golden age’ for cryptocurrency, despite skepticism and the potential for the move to be reversed by future presidents.

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Word is buzzing around that Donald Trump might kick off his presidential term by setting up a Bitcoin Reserve. Following Wyoming Senator Cynthia Lummis’ introduction of the Bitcoin Reserve Act, states like Texas and Pennsylvania have proposed their own related bills. Even countries like Russia, Thailand, and Germany are hinting they might do the same.

The idea is, if governments all start cosying up to Bitcoin, could it smash the boom-and-bust cycle we’ve been used to seeing in crypto prices? Iliya Kalchev from crypto lender Nexo thinks it could be a game-changer, giving Bitcoin a more solid role on the global stage.

People have always tried to label each Bitcoin cycle as “the new norm.” The conditions have never been more perfect. No president in the US has shown so much support for crypto before, especially with control of the Senate and Congress.

Part of Lummis’ proposed Bitcoin Act is that the US government would buy a whopping 200,000 BTC each year for five years, giving themselves a nest egg of 1 million Bitcoin to sit tightly on for a minimum of 20 years.

But how could that happen? Jack Mallers, who founded Strike, thinks Trump could sneak in an executive order to snap up Bitcoin on his first day as president. Dennis Porter also thinks Trump could explore creating a Bitcoin reserve through an executive order. Any regrets, though, and this move could be quickly reversed by the next president. So, if the Bitcoin Reserve is for the long run, it’ll probably need the backing of legislation with majority support.

But the writing could already be on the wall, as Bitcoin has become more popular in the US political sphere alongside a Republican-dominated Congress and slim majority Senate. The only spoiler could be a few naysaying Republicans swayed by progressive outrage over the idea of handing government wealth over to Bitcoin.

This month, Alex Krüger, economist and founder of Asgard Markets, said that the election result swung things in Bitcoin’s favor.

Krüger didn’t deny the possibility of a Bitcoin bear market, similar to past cycles, but emphasized that this cycle might play out differently. With nominations for pro-crypto Paul Atkins for the SEC Chair, pro-crypto Scott Bessent as Treasury Secretary, and former PayPal COO David Sacks for the Crypto Czar position – Trump seems to be steering crypto toward a golden age.

Everyone always thinks “this cycle will be different,” ensued by talk about mainstream and institutional adoption. Every time, though, the theory crashes and burns in a Bitcoin bear market, with all the sunken investments.

Betting your whole life savings on a supercycle? Not wise, according to Chris Brunsike, Partner at venture capital firm Placeholder and former blockchain products lead at ARK Invest; he sees the Bitcoin supercycle as a myth.

But, with Trump’s re-election, Bitcoin might be entering bright new territory. The US president seems to be living up to his pro-crypto promises, even promising never to sell any Bitcoin from a potential US Bitcoin stash.

If the Bitcoin Reserve Act ever becomes law, global competition to store Bitcoin could ignite. States becoming market buyers would attract a flood of investors. Some watchers think the introduction of investors from the stock market and a government-backed Bitcoin Reserve could make the market less jittery. Whether this would soften the blow of bear markets compared to past cycles remains to be seen.

With many more halvings on the horizon, it’s hard to imagine that all will follow the predictable four-year pattern. Bitcoin’s price movements might stop leaning so heavily on internal influences, like the Halving, and sway more to external factors such as institutional adoption and political developments.