The digital currency market is closely monitoring two significant announcements from the transition team of the current U.S. administration: the selection of the next treasury secretary and the proposition of establishing a national Bitcoin reserve.
The latter has been identified as a key factor influencing the price of Bitcoin, although it has generated varied responses from prominent asset managers in the industry.
Mathew Siggel, the head of digital assets research at VanEck, expressed full approval of the plan, stating that the company fully endorses the Strategic Bitcoin Reserve.
Conflicting Signals from BlackRock
Contradictory reports have emerged from BlackRock, the largest asset management firm globally. Initially, there were indications that the firm supported the idea of a Bitcoin reserve.
However, contradicting these earlier claims, Eleanor Terret from Fox Business referenced sources close to BlackRock disavowing any endorsement of a strategic Bitcoin reserve despite recent rumors suggesting otherwise.
Among the critics, long-time Bitcoin skeptic Peter Schiff warned about the potential impacts on the U.S. dollar and Bitcoin itself if the proposal goes through. Schiff expressed concerns about hyperinflation resulting from excessive printing of dollars to purchase Bitcoin, eventually devaluing the dollar to a point where the U.S. would struggle to continue buying Bitcoin.
In contrast, Senator Cynthia Lummis, a proponent of establishing a Bitcoin reserve, advocated for trading U.S. gold reserves for Bitcoin, showcasing a contrasting perspective.
The divergent opinions have created uncertainty around the likelihood of President Trump implementing the Bitcoin reserve. At present, the odds, as per Polymarket, of the President-elect proceeding with the proposition stand at less than 40%.
This uncertainty implies that the potential establishment of a Bitcoin reserve has not been factored into the market dynamics, according to Adam Back from Blockstream. Back speculated that Bitcoin’s value could soar to over a million dollars if investors start preemptively reacting to the formation of a U.S. Bitcoin reserve.
In the days and weeks ahead, more clarity is expected to emerge regarding the fate of the Bitcoin reserve proposal under the current administration.