According to a report from Reuters on November 22, Bitcoin's price reached an all-time high on November 22, targeting the $100,000 mark, as the market anticipates that regulations on Bitcoin will be more favorable after Trump takes office.
Since the beginning of this year, the price of Bitcoin has more than doubled, rising about 45% since November 5 when Trump won the election by a landslide, during which voters also elected a group of pro-cryptocurrency lawmakers to Congress.
However, after reaching a historic high of $99,800 on the 22nd, Bitcoin's price slightly fell back to around $99,383 that day, with an increase of 1.33%.
However, the momentum for further increases in Bitcoin's price seems very strong, with expectations of a third consecutive week of gains exceeding 10%. Moreover, it is expected to set the highest monthly increase since February of this year. This surge has made Bitcoin one of the big winners of the so-called 'Trump trade.'
According to a report from Newsweek on November 18, Trump's recent reelection as President of the United States has sparked discussions about his ambitious plan to establish a national strategic Bitcoin reserve—but what would it look like? Is it feasible?
In Trump's second term, the U.S. national Bitcoin reserve could not only reshape America's financial landscape but also the global cryptocurrency market. The 'Trump effect' has already made Bitcoin surpass silver again, becoming the eighth largest asset in the world.
Can Trump make the U.S. the 'crypto capital of the earth'?
President-elect Trump announced during his campaign that he would work to make the U.S. the 'crypto capital of the earth' and declared his intention to establish a national Bitcoin reserve.
In July this year, at a Bitcoin conference held in Nashville, Tennessee, Trump discussed plans to use the Bitcoins currently held by the government—estimated at around 200,000, worth about $18 billion, most of which were seized in anti-crime operations—to establish this reserve.
Bitcoin supporter Senator Cynthia Lummis has been a major advocate of the plan. She proposed a Bitcoin bill in July 2024, suggesting the establishment of a decentralized Bitcoin vault network managed by the U.S. Treasury.
The bill outlines a plan for the government to acquire up to 200,000 Bitcoins each year over the next five years, potentially accumulating a total of 1 million Bitcoins, which would represent about 5% of the total Bitcoin supply.
After Trump's victory, Lummis expressed her excitement on platform X. She wrote: "We will establish a strategic Bitcoin reserve."
However, some financial experts remain cautious. Arash Alushe, an assistant professor of finance and fintech at Dublin City University, expressed doubts about the feasibility of such a reserve.
Alushe told Newsweek reporters: "The concept of a U.S. 'strategic Bitcoin reserve' is groundbreaking, but under current conditions, it is highly unlikely to become a reality."
He added: "Establishing such a reserve would mean the U.S. government officially supports Bitcoin, potentially putting public funds into Bitcoin and recognizing it as a national asset, which is not in line with the government's cautious stance on cryptocurrencies so far."
Alushe highlighted several challenges, including regulatory barriers, stating that "significant regulatory policy changes are needed, along with buy-in from several conservative institutions that are cautious about high-volatility, decentralized assets."
Alushe explained that Bitcoin's market cap is limited and "cannot provide the investment capacity or stability required for a reserve asset," while "large-scale purchases could drive up prices, resulting in additional costs and market distortions."
He also pointed out the debt considerations, noting that the U.S. government's current budget deficit is about $1.8 trillion, and "it's hard to imagine Trump borrowing more money to invest in volatile assets like Bitcoin."
On the opposing side of the debate, Gui Songping, a senior manager at the blockchain-based cryptocurrency and application platform 'New Blockchain', believes that establishing a strategic Bitcoin reserve could significantly boost the market.
She told Newsweek reporters: "The Bitcoin strategic reserve fund established by the U.S. government would be a catalyst that would drive Bitcoin prices to soar to the highest levels predicted by analysts—some predict Bitcoin prices could reach $500,000."
Gui Songping said that the U.S. government's acceptance of Bitcoin would encourage institutional investors, including pension funds and sovereign wealth funds, to enter this space. She added: "We have already seen the significant market impact of Bitcoin exchange-traded funds (ETFs)—the U.S. Bitcoin strategic reserve fund will add momentum to the historical price surge of Bitcoin."
Gui Songping also stated that currently, Trump's election provides support for cryptocurrencies in the eyes of global investors. She said: "The outcome of the U.S. presidential election confirms that cryptocurrencies are a mature asset class. Bitcoin and other cryptocurrencies are under close scrutiny and are used to gauge the sentiment surrounding the impact and outcomes of President Trump's term on global capital markets."