President Trump's creation of a Strategic Bitcoin Reserve marks a significant step in legitimizing cryptocurrency. This event represents a new chapter for Bitcoin as a stable investment tool.
The Impact of Trump's Strategy on Bitcoin
President Donald Trump’s executive order to establish a Strategic Bitcoin Reserve is a historic turning point for cryptocurrency. This move positions Bitcoin as the most viable hedge against global financial uncertainty. Currently, Bitcoin accounts for 1.3% of the global money supply, marking a milestone of mainstream recognition once thought impossible.
Overcoming Risks and Legitimization
Matt Hougan, Bitwise's Chief Investment Officer, recalls his first encounter with Bitcoin when it broke the $1 mark in 2011. At that time, investing in Bitcoin was seen as buying a lottery ticket because of the storage, regulation, and technological challenges. Over time, Bitcoin has overcome various hurdles, including the launch of Coinbase and institutional custody services like Fidelity. The main concern about Bitcoin's future was alleviated when Trump signed the order on March 6 to create the U.S. reserve, starting with 103,500 BTC.
Growth in Corporate Participation
Following the U.S. government's approval of involvement in the Strategic Bitcoin Reserve, Bitwise has observed an increase in institutional allocations to cryptocurrency. Whereas clients previously invested around 1% in Bitcoin, today that figure has risen to 3%, and is expected to reach 5% or higher, as investors realize the risks associated with BTC are decreasing.
The creation of a Strategic Bitcoin Reserve opens new prospects for cryptocurrency and signals its strengthening as a recognized financial unit. Government backing may lead to increased interest and investments.
