With President-elect Donald Trump’s inauguration just days away, speculation is mounting over his administration’s crypto policies, particularly the potential adoption of a national Bitcoin reserve. Central to this discussion is Senator Cynthia Lummis’ BITCOIN Act, which proposes the U.S. Treasury acquire one million Bitcoin over five years, a move supporters see as revolutionary and critics deem risky.
Stay Ahead of the Market:
- Discover outperforming stocks and invest smarter with Top Smart Score Stocks
- Filter, analyze, and streamline your search for investment opportunities using Tipranks' Stock Screener
Meanwhile, some traders, like Alex Becker, argue that Bitcoin’s potential is being underestimated, calling the $150,000 price target “silly low” given the likelihood of broader adoption by institutions and nations. Echoing this sentiment, crypto analyst Will Clemente suggested Bitcoin could hit $1 million if countries start adopting it as a strategic reserve asset.
Bitcoin as a Solution for U.S. Debt?
Proponents like Samson Mow, CEO of Bitcoin accelerator Jan3, believe a national Bitcoin reserve could alleviate U.S. debt burdens. Mow told Cointelegraph that adopting Bitcoin could rebase the dollar and leverage future Bitcoin appreciation to stabilize the economy. “If the U.S. adopts Bitcoin on a meaningful scale, it could offset or even eliminate debt,” Mow explained.
However, concerns about hyperinflation arise if these purchases are funded through money printing, as former New York Fed President Bill Dudley warned. Mow suggested an alternative: transitioning gold reserves into Bitcoin to avoid inflationary consequences while strategically strengthening U.S. reserves.
Critics Believe Bitcoin Reserve Could Destabilize Financial System
Critics argue the proposal may destabilize the financial system. Nic Carter of Castle Island Ventures pointed out that smaller nations like El Salvador benefit from Bitcoin adoption, but for the U.S., a Bitcoin reserve might challenge the dollar’s role as the global reserve currency. Santiago Carbó, an economics professor, told Cointelegraph he doubted the bill’s feasibility, citing Bitcoin’s lack of essential reserve asset features like security.
As the U.S. contemplates the idea of a national Bitcoin reserve under the BITCOIN Act, the debate highlights both promise and peril. Supporters envision Bitcoin as a solution for reducing U.S. debt and securing financial leadership, while critics caution against risks to the dollar’s dominance and economic stability.
At the time of writing, Bitcoin is sitting at $102,534.89.
