As United States Senator Cynthia Lummis presented the official Strategic Bitcoin Reserve bill, which, among other objectives, aims to boost transparency in the Federal government’s management of its Bitcoin (BTC) holdings, its adoption might impact the price of the maiden cryptocurrency.
As it happens, days after suggesting the adoption of a strategic Bitcoin reserve as backing for the U.S. dollar (USD), Lummis presented the ‘Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide’ or the ‘BITCOIN Act of 2024’, in the U.S. Senate on July 31.
Indeed, according to the text of the Wyoming Republican Senator’s suggested legislation, its goal is:
Picks for you
“To establish a Strategic Bitcoin Reserve and other programs to ensure the transparent management of Bitcoin holdings of the Federal Government, to offset costs utilizing certain resources of the Federal Reserve System, and for other purposes.”
Bitcoin price prediction if the bill is adopted
Should Senator Lummis’ bill become a law, the development could have a tremendous impact on the price of the flagship decentralized finance (DeFi) asset, which has historically demonstrated the habit of reacting to positive (or negative) related news.
In the case of the ‘Bitcoin Act,’ its adoption would likely act as a bullish trigger for the related crypto asset, as it might lead to increased demand, a positive market perception – enhancing Bitcoin’s legitimacy and perception as a store of value, as well as reducing its supply, all of which typically drives up the price.
While predicting the exact price of Bitcoin in such a case is challenging, it is possible that shortly after the announcement, it would gain 25-50% from its current price based on historical reactions to large purchases and supply shocks, which would mean between $80,000 and $97,000.
Furthermore, over the five-year acquisition period, the price of Bitcoin could witness a more substantial increase, perhaps doubling or tripling from current levels if the markets react favorably to the Strategic Reserve execution, reaching between $128,000 and $194,000.
Bitcoin price analysis
For now, the largest asset in the crypto sector by market capitalization is changing hands at the price of $64,380, recording a 2.67% decline in the last 24 hours, an advance of 0.20% across the previous seven days, as well as gaining 2.94% over the past month, as per data on August 1.
As a reminder, former U.S. President and current presidential candidate Donald Trump has recently endorsed Bitcoin at the largest crypto conference in the world, suggesting he would make it his administration’s policy to “keep 100% of all Bitcoin the U.S. government currently holds or acquires into the future.”
All things considered, the enactment of Senator Lummis’ Bitcoin reserve bill might have a positive effect on the price of the world’s first cryptocurrency. However, trends in the crypto market can sometimes shift unexpectedly, so doing one’s own research is critical when investing.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
