As an analyst, I posit that the creation of a strategic Bitcoin (BTC) reserve within the United States could significantly expedite the adoption of Bitcoin beyond what is anticipated with the launch of exchange-traded funds (ETFs) in 2024, according to CoinShares’ recent blog post.
2024 saw a proposal from U.S. legislators for the Bitcoin Act. This act aimed to instruct the U.S. Treasury Department to establish a “strategic Bitcoin holdings” by acquiring one million Bitcoins over a five-year span. During this time, President-elect Donald Trump gave his support to this plan; however, it has yet to become law.
According to CoinShares, it’s their opinion that the passing of the Bitcoin Act in the U.S. could influence Bitcoin more significantly over the long term compared to the introduction of Bitcoin ETFs.
According to CoinShares, their numerous conversations with institutional clients have revealed that the main obstacle to these institutions adopting Bitcoin is its credibility as a financial asset class.
The act of passing the Bitcoin Act would effectively remove the negative perception surrounding Bitcoin investment for institutional investors, as it would be seen as an approval from the world’s most influential government.
Gaining traction
Initiated in July by U.S. Senator Cynthia Lummis, the Bitcoin Act has seen increased support following the November U.S. elections, during which the Republican party secured control of the Senate under former President Trump’s administration.
Additionally, various U.S. states, such as New Hampshire and North Dakota, have proposed legislation aimed at establishing Bitcoin reserves.
In January 2024, US regulators gave their approval to over a dozen Bitcoin spot ETFs. These funds reached a milestone of more than $100 billion in total assets for the first time in November, as reported by Bloomberg Intelligence.
As a crypto analyst at Steno Research, I foresee that Bitcoin Exchange-Traded Funds (ETFs) will experience an estimated additional net inflow of approximately $48 billion by the year 2025.
Institutional investments pouring into Bitcoin might trigger a sudden increase in demand, which could lead to a significant rise in Bitcoin’s price by the year 2025, according to predictions made by Sygnum Bank in their statement from December.
According to Adam Back, the CEO of Blockstream, if the Bitcoin Act is passed, it could significantly speed up Bitcoin’s growth, potentially causing its market value to surpass $1 million per coin in the future.
As a researcher, I posit that when other governments adopt similar strategies, this trend could potentially trigger an increased influx of resources into Bitcoin over the upcoming years, setting off a substantial surge in asset flow. This is according to CoinShares’ analysis.
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2025-01-11 00:52