The US government could buy up to one million $BTC in the coming years. Experts predict that this move could drive the price of the cryptocurrency up to USD 800,000 by the end of 2025.
President-elect Donald Trump may designate Bitcoin as a US reserve asset unexpectedly soon. This speculation stems from information shared by Jack Mallers, CEO of Strike.
Mallers suggests that Trump could issue an executive order on his first day in office that would initiate this change.
A potential executive order could be part of the "Dollar Stabilization Act" that would grant Trump significant powers to protect the U.S. dollar.
Mallers also mentioned a possible significant purchase of bitcoins by the White House on Trump's first day in office, "It wouldn't be a million BTC magnitude, but it would be a significant position."
Bitcoin as a reserve asset
This is in line with the Bitcoin Act of 2024, introduced by pro-crypto Senator Cynthia Lummis.
The bill proposes that the Treasury Department and the Federal Reserve acquire 200,000 BTC per year for five years, with the goal of accumulating one million BTC, or 5% of the total Bitcoin supply, to hold for two decades.
The US government's acceptance of Bitcoin as a reserve asset has prompted ambitious price predictions.
Perianne Boring, founder of The Digital Chamber, predicts a significant price increase if Trump's policy comes to fruition.
She estimates that Bitcoin's price could exceed $800,000 by the end of 2025 due to its fixed supply and growing demand.
The stock-to-flow (S2F) model, a popular tool for predicting cryptocurrency trends, supports this outlook. Its creator, PlanB, predicts an average Bitcoin value of $500,000 in 2025.
Potential peaks could then reach $1 million, which would increase Bitcoin's market capitalisation from over $2 trillion to around $15 trillion.
The U.S. government's move to accumulate Bitcoin could inspire a global trend where other countries will consider strategic reserves of Bitcoin, which will increase demand and support its price.
Institutional acceptance of Bitcoin
BlackRock, which manages more than $10 trillion in assets, recognizes the growing importance of Bitcoin.
The firm suggests a 1-2% portfolio allocation to Bitcoin for diversification purposes. In a Dec. 12 report, management highlighted the potential of Bitcoin in a multi-asset portfolio as a suitable alternative for investors.
Global reserve assets are worth approximately $900 trillion. A 2% allocation to Bitcoin from this pool could increase its price to approximately $900,000 per unit, underscoring the transformative potential of institutional adoption.