Recently, the cryptocurrency circle has been ignited by a striking proposal. Wyoming Senator Cynthia Lummis plans to promote legislation that would suggest that the U.S. government purchase 5% of the global Bitcoin supply, equivalent to about 1 million Bitcoins, and hold them as national reserve assets for at least 20 years. If this proposal is approved, it may have a profound impact on the market in the short term.
Short-term volatility may intensify, and long-term trends are unclear
Ben Simpson, a cryptocurrency analyst and CEO of Collective Shift, said the proposal would be a catalyst for volatility in the Bitcoin market. “If this strategic reserve plan is approved, I expect Bitcoin prices to rise quickly, but then they may fall back, and market uncertainty will be further exacerbated,” he told Cointelegraph.
In addition, TradingView data shows that as of now, Bitcoin's market share has fallen to 56.63%, with a decline of 7.20% over the past 30 days. Some market observers, such as cryptocurrency trader Momin, believe this downward trend may continue and expect altcoins to perform strongly in the coming week. However, Simpson warns investors that the arrival of altcoin season is not instantaneous: 'The market may experience greater volatility, and the likelihood of a direct shift to an altcoin bull market is low.'
Bitcoin vs Altcoins: A Clash of Old and New Powers
As Bitcoin's price hovers around $100,000, the market is experiencing a 'rotation of power'. Simpson believes Bitcoin's dominance will further weaken, and the rise of altcoins may provide new opportunities for investors. However, Bitfinex analysts emphasize that Bitcoin's status as a store of value is difficult to shake in the short term. They point out that many altcoins' returns against Bitcoin have not yet broken historical highs, and Bitcoin remains a stable and competitive asset.
'We believe that regardless of market adjustments, Bitcoin will still be an important component of institutional portfolios,' Bitfinex analysts said. They further added that if prices correct, it could be an excellent buying opportunity for long-term investors: 'Spot demand remains strong, and leverage levels are relatively healthy. Even if price volatility increases during the holidays, the overall market trend still shows strong resilience.'
The Future of Bitcoin: The Solid Path of Digital Gold
Supporters have a firm belief in the long-term value of Bitcoin. Bitfinex analysts point out that Bitcoin is increasingly viewed by institutions as the 'perfect substitute for gold' and a true means of value storage. This strengthening consensus has led the market to remain optimistic about Bitcoin's price reaching six figures. Notably, global investment management firm VanEck recently reiterated its price target of $180,000 for this Bitcoin cycle, believing that the crypto bull market has only just begun.
Whether it is Senator Lummis's proposal or the market's outlook on Bitcoin's future, the global cryptocurrency ecosystem is at a new turning point. Finding one's rhythm in a rapidly changing market will be the greatest challenge everyone faces.
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