The debate over Bitcoin (BTC) adoption at the state level has become a hot topic after Russian leaders joined the bandwagon. Since the re-election of newly elected President Donald Trump, the United States has been at the forefront of advocating for a strategic Bitcoin reserve.
Moreover, top Fed officials believe that Bitcoin is a digital gold with better properties, including a limited supply of 21 million units. Additionally, the adoption of spot Bitcoin ETFs has proven to be a major success on Wall Street, indicating increased demand from institutional investors.
The state of Alabama will lead the strategic Bitcoin Reserve Plan
The state of Alabama could create a strategic Bitcoin reserve to stimulate local investments and businesses. According to State Auditor Andrew Sorell, the passage of a Bitcoin plan will protect the people of Alabama from rising inflation and the potential impact of ongoing global de-dollarization.
“A well-balanced portfolio should include exposure to many different types of asset classes. Right now, crypto is a $3 trillion asset class to which the state has zero exposure. It is also the fastest growing asset class, with the greatest potential for price appreciation. Investing in government bonds and bonds certainly has its place, but achieving a return of 4% while inflation is 2.7% is hardly break-even,” says Sorell.
Market impact
According to Dennis Porter, co-founder of Satoshi Action Fund, the adoption of a strategic Bitcoin reserve will largely escalate the supply-demand crisis. Additionally, Bitcoin supply on centralized exchanges has fallen to a multi-year low of less than 2.26 million amid increased demand from whale investors.
With the United States under the Trump administration looking to purchase approximately 1 million Bitcoin over the next five years, the total supply will shrink sharply and result in a super bull cycle.
On Tuesday, Eric Trump, the executive vice president of the Trump Organization, predicted that Bitcoin’s price will easily reach $1 million, after recently hitting $100,000 for the first time.
Credit : coinpedia.org
