Emily Walker
The 2024 United States election significantly impacted the cryptocurrency sector, particularly with Donald Trump’s reelection rejuvenating Bitcoin and the broader crypto market following a lackluster performance in the second and third quarters.
During his campaign, Trump pledged to establish a strategic Bitcoin reserve, leading to extensive discussions around this BTC reserve and its potential implications for both the U.S. economy and the cryptocurrency arena.
Why Establish Strategic Bitcoin Reserves in the US?
Ki Young Ju, the CEO and founder of CryptoQuant, recently expressed his views on the idea of strategic Bitcoin reserves in the U.S. In a post shared on the X platform, he argued that employing Bitcoin, the largest cryptocurrency, to mitigate U.S. debt could be a viable solution.
According to Young Ju:
In the last 15 years, Bitcoin’s market capitalization has surged to $2 trillion due to $790 billion in realized capital inflows, with $352 billion inflows this year alone adding another $1 trillion.
He also pointed out that if the U.S. government acquires 1 million BTC by 2050 and classifies this cryptocurrency as a strategic asset, it could reduce domestic debt (which constitutes 70% of the total) by 36%. He noted that while the remaining 30% owed to foreign entities may be difficult to address, the strategy doesn’t depend on using Bitcoin to eliminate all debt, making it feasible.
Young Ju expressed concerns that utilizing a “pumpable asset” like BTC for paying off dollar-based debt might encounter issues with creditor acceptance. Nonetheless, he suggested that establishing a strategic Bitcoin reserve could represent a “symbolic first step” towards granting Bitcoin national and global acceptance, similar to the status of gold.
Furthermore, he identified a potential risk of significant BTC holders selling off their assets to counteract the U.S. government’s reserve establishment. However, he expressed confidence that if governments continue acquiring Bitcoin up to 2050 and the asset appreciates, it is unlikely that these holders would actually sell their BTC.
Current BTC Price Overview
Currently, Bitcoin’s price stands near $97,000, showing a slight dip of 0.4% over the past 24 hours. As per CoinGecko data, Bitcoin has decreased by 3.6% throughout the last week.