US Treasury categorizes Bitcoin as “digital gold,” highlighting its role as a store of value in DeFi.
Bitcoin’s market cap shows remarkable growth, rising from $6.4 million in 2015 to $2.3 trillion in 2024.
Federal Reserve Chair Jerome Powell compares Bitcoin to gold, emphasizing its speculative nature over traditional currency functions.
In its Q4 2024 report, the US Treasury noted the significant expansion of Bitcoin and other digital assets. The report identifies Bitcoin’s primary function as a store of value within the decentralized finance (DeFi) sector, referring to it as “digital gold.”
This terminology aligns with sentiments expressed by Federal Reserve Chair Jerome Powell, who also compared Bitcoin’s attributes to those of gold, noting its role as a speculative asset rather than a currency tied to traditional economic activities like the US dollar.
Bitcoin’s market capitalization illustrates its dramatic growth: from $6.4 million in 2015, to $194 billion in 2019, and reaching $2.3 trillion currently. This growth trajectory continues as Bitcoin’s price recently surpassed the $100,000 mark. The Treasury’s report attributes this surge partly to speculative interest, which has prominently fueled the expansion of Bitcoin and similar crypto tokens.
The rise in Bitcoin’s value and market presence is influencing more corporations to integrate the cryptocurrency into their financial strategies.
A recent example is Worksport, a manufacturer that has opted to include Bitcoin and XRP in its corporate treasury operations, signaling a growing institutional acceptance and the potential for ‘Fear Of Missing Out’ (FOMO) among other companies.
Furthermore, the US Treasury highlighted the evolution of stablecoins, another digital asset class experiencing swift growth. The report indicates that the rise of stablecoins has modestly boosted the demand for short-dated treasury securities.
Many fiat-backed stablecoins hold a significant amount of their reserves in treasury bills and treasury-backed repurchase agreements.
According to the Treasury’s analysis, there is approximately $120 billion in total stablecoin collateral currently invested in US Treasuries.
Looking ahead, the Treasury anticipates continued expansion in the stablecoin market and the broader digital asset sector. They also forecast that the substantial growth and volatility observed in the crypto asset market could prompt increased hedging activities and a flight-to-quality movement, potentially increasing the demand for US Treasuries.
This assessment underlines the significant impact of digital assets on financial markets and institutional investment behaviors.
Bitcoin (BTC) is currently priced at $99,721, with a slight decline of 0.18%, hovering near the psychological resistance of $100,000 and key support at $90,000. Technical indicators show neutral sentiment with a bullish bias if Bitcoin holds above $95,000.
With a robust market cap of $1.97 trillion, analysts predict a potential breakout toward $110,000–$120,000 in the short term.
