On Thursday (January 9), Bitcoin dropped to around $95,000, hitting a low of $94,809. After U.S. JOLTS labor data unexpectedly exceeded expectations, initial jobless claims data fell short, and the Federal Reserve's FOMC meeting minutes hinted that officials are eager to slow the pace of rate cuts, hawkish pricing stimulated a return of funds to the dollar. The former Chinese billionaire Zhao Changpeng revealed that the Bhutan Government Management Company has established a cryptocurrency strategic reserve covering Bitcoin, Ethereum, and Binance Coin.
Bhutan Government Management Company: Officially Established Cryptocurrency Strategic Reserve
Zhao Changpeng revealed in a tweet that the Bhutan Government Management Company (GMC) has established a cryptocurrency strategic reserve covering Bitcoin, Ethereum, and Binance Coin (BNB). He noted that this is the first national strategic reserve to include multiple cryptocurrencies, showcasing Bhutan's open attitude towards diverse crypto assets.
He mentioned that this opens the door for other countries to incorporate cryptocurrencies into their national strategic reserves, particularly various crypto assets including Binance Coin. He predicts that Bhutan's precedent will not be the last and may lead more countries to explore similar strategies.
CoinTelegraph pointed out that incorporating digital assets into the GMC's strategic reserve aims to enhance the jurisdiction's economic resilience and provide new opportunities through participation in Bitcoin mining. The city government is expected to discuss its crypto strategic reserve plan with senior Bhutanese government officials and global industry leaders in March.
Unlike other global jurisdictions exploring strategic reserves limited to Bitcoin, Bhutan's GMC seeks to store several established cryptocurrencies as part of its potential crypto strategic reserve. The management department stated, 'GMC intends to recognize digital assets with large market capitalization and deep liquidity to ensure they can be easily bought and sold with minimal price impact.'
Additionally, the GMC will seek to identify digital assets issued on a 'more mature, more secure blockchain that supports monitoring on-chain transactions.'
Not long ago, Bhutan announced the issuance of $100 million in bonds, set to begin construction of the GMC project in November 2024. King Jigme Khesar Namgyel Wangchuck stated that the project aims to become an economic corridor connecting South Asia and Southeast Asia, with administrative autonomy and legal independence. Officials indicated that the GMC will be built in phases, expected to be completed in 21 years.
As GMC announces its crypto reserve, the Bhutanese government has already held Bitcoin and other crypto assets through the Royal Government's business department, Druk Holding and Investments (DHI). According to Arkham Intelligence, Bhutan holds 11,688 Bitcoins ($1.12 billion) and 656 Ethereums ($2.2 million). Additionally, Druk holds a small amount of Ethereum on chains like Polygon, BNB Chain, and Base.
According to Forbes, Bhutan has been investing in Bitcoin since at least 2019, with a significant portion of Bitcoin coming from local Bitcoin mining operations.
DHI collaborates with large cryptocurrency mining companies like Bitdeer and is also a customer of distressed cryptocurrency lending institutions BlockFi and Celsius, reportedly investing millions in digital assets.
Fidelity: Nation-states and central banks will buy Bitcoin in 2025
According to CoinDesk, Fidelity Digital Assets predicts that 2025 will be a turning point for Bitcoin adoption, with more countries, central banks, sovereign wealth funds, and government treasuries expected to buy Bitcoin to build strategic reserves.
The report noted that as inflation rises, currency depreciates, and fiscal deficits widen, allocating Bitcoin may better respond to macroeconomic headwinds compared to not allocating.
Fidelity analyst Matt Hogan stated that Bitcoin, as a strategic asset, may attract more countries to adopt accumulation strategies, although some countries might secretly buy to avoid driving up market prices.
Currently, the United States, the United Kingdom, Ukraine, Bhutan, and El Salvador are the governments holding the most Bitcoin, with most obtained through government seizures or recovered from criminal activities. Additionally, the report mentions that U.S. presidential candidate Trump and Senator Cynthia Lummis support the establishment of a national Bitcoin reserve.
If passed, the Bitcoin Act proposed by Lummis in 2024 may encourage other countries to follow suit. Fidelity noted that this political and financial game will further drive the global adoption of Bitcoin.
U.S. Traditional Market Bearish: Initial Jobless Claims, FOMC Minutes Hawkish Pressure
U.S. labor data shows strong performance, with initial claims for unemployment benefits falling to 201,000, below the expected 218,000. In December, private sector employment increased by 122,000 but fell short of market expectations.
Bloomberg reported that, against the backdrop of rising inflation risks, Federal Reserve officials adopted a new dovish stance in December, deciding to slow the pace of interest rate cuts in the coming months.
The minutes from the Federal Open Market Committee (FOMC) meeting on December 17-18 indicated, 'Participants stated that the FOMC committee has reached or is close to the appropriate point to slow the pace of policy easing. Many participants noted that various factors highlight the need for cautious monetary policy decision-making in the coming quarters.'
The minutes released on Wednesday in Washington indicated that Federal Reserve officials noted rising inflation data, continued strong spending, and reduced downside risks to the labor market and economic activity outlook. The U.S. central bank officials lowered the benchmark lending rate by 25 basis points to a range of 4.25% to 4.5% during this meeting.
Bitcoin Technical Analysis
Bitcoin price plunged below $95,195, confirming that the bearish trend is likely to continue for some time, paving the way for new negative targets starting from $90,000 and extending to $87,055.
It should be noted that trading back above $95,195 will lead to an attempt to recover prices and try to establish a bullish wave during the day.
