As a seasoned analyst with over two decades of experience navigating financial markets and government policy, I find Senator Cynthia Lummis’ proposal for the US Treasury to establish a Bitcoin strategic reserve intriguing. Having witnessed the evolution of technology and finance from the dot-com boom to blockchain revolution, I appreciate her forward-thinking approach to digital assets.
Senator Cynthia Lummis from Wyoming is proposing that a part of the U.S. Treasury’s gold reserves be transformed into Bitcoin (BTC), aiming to create a strategic Bitcoin reserve.
Lummis explained to Bloomberg that transforming U.S. Treasury gold certificates into Bitcoins wouldn’t impact the federal government’s financial records right away, unlike spending around $90 billion to buy Bitcoins at present prices.
Previously, a U.S. Senator proposed that some of the U.S. Treasury’s assets be swapped to buy Bitcoins for the strategic reserve, without clarifying exactly which assets within the Treasury’s portfolio would be liquidated to obtain more of this digital currency.
As a financial analyst, I find it crucial to highlight the recent proposal of the Strategic Bitcoin Reserve bill in the Senate. Senator Lummis emphasized the importance of this measure, stating that families within Wyoming are grappling with escalating inflation rates, while our nation’s debt continues to climb to uncharted levels.
Overcoming objections to a BTC strategic reserve
Senator Lummis’ Bitcoin long-term storage plan aims to purchase around 1 million Bitcoins, which is equivalent to 5% of the entire supply. These Bitcoins are intended to be kept for a period of 20 years. The estimated cost for this extensive goal, based on current market values, is about $90 billion.
Recently, investor and asset manager Anthony Pompliano has suggested that there’s a worldwide competition among national governments to acquire Bitcoin. According to him, the high-valued price tag is a negligible expense in this global race.
“The national debt increased by $850 billion in the last 90 days. If we were to try to put that same $850 billion into Bitcoin, that is about half of the current market cap. So, we’re talking about 50-100 billion dollars — small rounding errors when it comes to government spending. And I think that it is well worth the risk-reward.”
In simpler terms, Mike Novogratz, the CEO and founder of Galaxy Digital, expressed his doubts that a strategic Bitcoin reserve would be established during President-elect Donald Trump’s term.
Should a strategic reserve for Bitcoin be created during the upcoming presidency of Donald Trump, Novogratz predicts that the value of Bitcoin could soar as high as $500,000 per coin.
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2024-11-17 23:12