NASHVILLE, TN – JULY 27: Former President and 2024 Republican presidential candidate Donald … (+)
Getty Images
Bitcoin’s price rose above $106,000 for the first time on growing optimism about its potential role as a U.S. reserve asset.
This milestone comes on the heels of President-elect Donald Trump’s announcement of the creation of a Bitcoin Strategic Reserve, reminiscent of the U.S. Strategic Petroleum Reserve.
In an interview with CNCB on Thursday, President Trump reaffirmed his administration’s commitment to establishing such a reserve, saying: It’s in front of us. ”
As excitement around digital assets grows, interest is not limited to just Bitcoin.
Inflows into crypto exchange traded products (ETPs) are at a record high. According to CoinShares, a staggering $3.2 billion flowed into these products last week, with Bitcoin accounting for more than half of these investments on a weekly, monthly, and annual basis.
BitMEX co-founder Arthur Hayes predicts that Bitcoin could reach “hundreds of thousands of dollars, maybe $1 million” if it gains formal reserve status. . Hayes believes a reserve-backed Bitcoin system could encourage an influx of institutional and retail investors.
Similarly, Bernstein analysts Gautam Chughani and Mahika Sapura predict that Bitcoin will reach $500,000 by 2029 and $1 million by 2033. Their theory is that regulated Bitcoin ETFs will attract traditional capital to the crypto market.
In their view, Bitcoin could account for 15% of “digital gold” demand by 2033.
But skeptics highlight Bitcoin’s notorious volatility as a major hurdle to its adoption as a reserve asset. Critics also point out that Bitcoin still lacks the stability traditionally associated with reserves such as gold and U.S. Treasuries.
Regardless of these debates, mainstream adoption of Bitcoin is accelerating. According to CoinShares, Bitcoin ETFs currently hold more than $130 billion in assets worldwide, and last week’s inflows alone accounted for 40% of all Bitcoin inflows this year.
