Bitcoin continues to consolidate, while investors remain uncertain amid economic data from the US.
Limited Impact of US Inflation Data and Powell's Testimony
The latest US CPI report revealed core inflation at 3.2% in January, slightly up from December’s 3.1%. Expectations of multiple interest rate cuts in 2025 were dampened. Federal Reserve Chair Powell acknowledged progress toward the 2% inflation target during his Capitol Hill testimony, but suggested rate cuts are not imminent. Bitcoin briefly dropped to $94,106 before rebounding.
US Strategic Reserve Proposal Boosts Bitcoin
Following a short-lived pullback, Bitcoin gained momentum as discussions surrounding a US Strategic Bitcoin Reserve (SBR) intensified. The proposed Bitcoin Act, introduced in late 2024, suggests the US government acquire one million BTC over five years with a 20-year holding period. This initiative could significantly shift the supply-demand balance in Bitcoin’s favor.
State-Level Bitcoin Initiatives
While the Bitcoin Act awaits congressional approval, multiple US states are taking independent steps to integrate Bitcoin into their financial strategies. The Utah House recently passed legislation supporting an SBR. New Hampshire introduced HB92, proposing 10% of state funds be allocated to Bitcoin ETFs. Even traditionally blue states like Massachusetts and New Hampshire are advancing BTC-related policies.
If Congress passes the Bitcoin Act, it could trigger widespread Bitcoin accumulation, impacting its prices. Investors are closely monitoring regulatory discussions that may shape Bitcoin's future in the coming months.
