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The BITCOIN Act of 2024 proposes that the U.S. could potentially purchase up to one million Bitcoins within five years, amounting to 5% of the total circulating Bitcoin supply. This move could position the U.S. as a significant player in the Bitcoin realm. There are even bolder projections on the amount of Bitcoin the U.S. could acquire. During the 2024 presidential election, then-candidate Robert F. Kennedy, Jr. suggested a plan for the U.S. to buy 550 Bitcoins daily until reaching a total of 4 million Bitcoins. Such aggressive Bitcoin procurement would be unprecedented.
However, it’s vital to note that there is no established framework for the U.S. to follow in this regard, and the realization of this strategic Bitcoin reserve remains uncertain. The Trump administration seems to be reframing the concept from a “Bitcoin reserve” to a “national digital asset stockpile,” hinting at the potential inclusion of other digital currencies.
The creation of a strategic Bitcoin reserve by the U.S. could have significant implications globally. If the largest economic powerhouse, the United States, starts accumulating Bitcoin, it could prompt other nations to follow suit to avoid being left behind. This phenomenon is likened to “political and economic game theory” by Fidelity, but seasoned crypto investors recognize it as FOMO, the fear of missing out.
Currently, El Salvador stands out as a nation actively buying substantial amounts of Bitcoin after adopting it as legal tender in 2021. Fidelity estimates El Salvador’s Bitcoin holdings at 6,000 Bitcoins valued around $600 million.
While this may seem substantial, a single U.S. company, MicroStrategy, possesses a much larger Bitcoin reserve, with 471,170 Bitcoins as of January 2025. Additionally, the U.S. government, through asset forfeitures and seizures, holds 198,000 Bitcoins. If the U.S. proceeds with establishing a strategic Bitcoin reserve, it could potentially acquire 200,000 Bitcoins in a year.
Watch closely for developments in Europe as well. The head of the Czech Republic’s central bank hinted at potential Bitcoin acquisitions, proposing to purchase $7 billion worth of Bitcoin, equivalent to roughly 5% of the Czech National Bank’s international reserves. If this initiative progresses, it could trigger similar actions by other European nations.
The idea that Bitcoin’s value could double due to increased buying by central banks and sovereign governments may seem unlikely, but the impact of new spot Bitcoin ETFs on Bitcoin prices serves as a testament to the potential market influence. In just a year, these ETFs garnered around $100 billion in assets under management, equivalent to roughly 1 million Bitcoins at a $100,000 Bitcoin price – the same amount the U.S. intends to acquire for its strategic Bitcoin reserve.
A significant surge in Bitcoin purchases took place, particularly following the launch of new spot Bitcoin ETFs. The price of Bitcoin shot up by an impressive 122% after the ETFs were introduced. Bitcoin’s value essentially doubled, soaring from $44,000 in January 2024 to over $100,000 by December of the same year. The implications of central banks and sovereign governments entering the Bitcoin market could be far-reaching, potentially beyond current expectations. This shift has the potential to revolutionize the crypto landscape, altering the rules of the global financial system and setting the stage for a whole new paradigm. Ultimately, the country with the largest Bitcoin holdings stands to emerge as the victor in this evolving financial landscape.
The question then arises: is it wise to invest $1,000 in Bitcoin at this moment? Prior to delving into Bitcoin investments, it’s worth considering the insights provided by The Motley Fool Stock Advisor analyst team. They have recently identified what they consider to be the top 10 stocks for investors to acquire presently, and surprisingly, Bitcoin did not make the list. The 10 selected stocks are anticipated to yield substantial returns in the foreseeable future. Reflect on the case of Nvidia, which made it onto this list back in April 15, 2005. If you had invested $1,000 at the time of their recommendation, you would now possess $795,728! The Stock Advisor offers a comprehensive roadmap for investors, including guidance on constructing a well-balanced portfolio, regular updates from analysts, and two fresh stock recommendations each month. Since 2002, the Stock Advisor service has significantly outperformed the S&P 500 index.
For comprehensive information, visit the website to learn more about Stock Advisor’s services. It’s essential to note that Dominic Basulto has investments in Bitcoin, and The Motley Fool endorses and holds positions in Bitcoin, adhering to a transparent disclosure policy.
