The crypto market is buzzing with discussions following Wyoming Senator Cynthia Lummis’ ambitious proposal for the U.S. government to acquire 1 million Bitcoin, equivalent to 5% of the total supply. Crypto analyst Ben Simpson predicts that such a move, if approved, could trigger heightened price volatility.
“I expect Bitcoin to pump initially, but it will likely rotate back afterward,” said Simpson, founder and CEO of Collective Shift, during an interview.
Lummis, a Republican and staunch crypto advocate, announced her plan after Donald Trump’s re-election in November. Her proposal involves holding the Bitcoin reserve for a minimum of 20 years, a strategy aimed at cementing the U.S. as a global leader in digital assets.
Simpson also highlighted a potential shift in market dynamics, with Bitcoin dominance showing signs of decline. Currently at 56.63%, dominance has dropped 7.20% in the past month, according to TradingView data. This shift, coupled with Bitcoin’s consolidation around $100,000, has paved the way for altcoins to gain traction. While some traders foresee a strong altcoin season, Simpson cautioned that the transition will likely be turbulent.
Institutional Interest in Bitcoin Stays Strong
Despite predictions of altcoin growth, Bitcoin remains a cornerstone of institutional portfolios. Analysts at Bitfinex emphasized that Bitcoin’s historical performance continues to outperform many altcoins, underscoring its role as a reliable investment.
“With Bitcoin surpassing six figures, we see strong spot demand sustaining these levels,” Bitfinex analysts stated. They also noted that leverage in the market remains manageable, suggesting that any dips during the holiday season could present buying opportunities rather than a cause for concern.
Bull Market Just Getting Started?
Analysts further observed a growing sentiment among Bitcoin proponents who view the asset as a superior alternative to gold and a definitive store of value. This belief, coupled with strategic accumulation by institutions, is expected to support Bitcoin’s long-term price stability.
Adding to the optimism, VanEck digital asset analysts Nathan Frankovitz and Matthew Sigel reaffirmed their $180,000 price target for Bitcoin at the peak of this cycle. They believe the next phase of the bull market is only beginning, driven by sustained interest from institutional investors and a broader embrace of cryptocurrencies.
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