Analysts discuss potential ramifications of Senator Lummis' proposal to establish a strategic Bitcoin reserve of 5%.
Potential Volatility Due to Bitcoin Reserve
Collective Shift analyst Ben Simpson warned that Senator Lummis' proposal for the US to acquire 5% of Bitcoin could spur short-term price volatility. He expects a strategic reserve approval to induce a price surge followed by a correction.
Trend of Declining Bitcoin Dominance
Cointelegraph reports that after Trump's election victory, Senator Lummis plans to move forward with legislation for purchasing 1 million Bitcoins for long-term storage. Currently, Bitcoin dominance is on a decline, with funds shifting to altcoins. As per TradingView, Bitcoin's dominance presently stands at 56.63%.
Analysis of Bitcoin's Market Strength
Bitfinex analysts believe Bitcoin will remain vital for institutional portfolios despite short-term dips. They affirm Bitcoin's viability as an investment, citing increasing trust in Bitcoin as a gold substitute and a true store of value.
The potential approval of a US strategic Bitcoin reserve could impact the market significantly, inducing short-term volatility and shifts in Bitcoin dominance.
