Bitcoin Reserve Bill Could End Cryptocurrency’s Half-Life. How different is this four-year cycle? With speculation growing that new President Donald Trump will sign an executive order mandating a Bitcoin reserve on day one, or pass legislation to create a reserve during his term, many are wondering what the move could be. Will it lead to a cryptocurrency supercycle?
Since Wyoming Senator Cynthia Lummis introduced the Bitcoin Reserve Act earlier this year, states like Texas and Pennsylvania have introduced similar proposals. Russia, Thailand, and Germany are considering their own proposals, and the pressure is mounting. If governments compete to protect their Bitcoin reserves, will we see a four-year cycle in cryptocurrency prices (often referred to as Bitcoin halvings)?
Iliya Kalchev, an analyst at cryptocurrency exchange Nexo, believes that “the Bitcoin Reserve Act could be a turning point for Bitcoin, signaling its ‘acceptance as a legitimate global financial instrument. ”
” Every Bitcoin revolution has a narrative that tries to push the idea that “this revolution is different.” Things haven’t gotten any better. The cryptocurrency space has yet to have a pro-crypto US president who controls the Senate and Congress”
Lummis’ proposed Bitcoin Act of 2024 would allow the U.S. government to use Bitcoin
Bitcoins Stocks fall $98,275 Collect 1 million Bitcoins by buying 200,000 BTC per year for five years and holding them for at least 20 years as a reserve asset in their place.
Strike founder and CEO Jack Mallers believes Trump has “the ability to use an executive order to buy Bitcoin in one day,” though he cautioned that it would not be the same as buying 1 million Bitcoins.
Dennis Porter, co-founder of the Satoshi Action Fund, a non-profit organization that supports U.S. pro-Bitcoin policy bills, also believes that Trump’s investigation into Bitcoin’s strategic reserve in an executive order. So far, the Trump administration has not directly confirmed the claims about the executive order, but when Trump was asked on CNBC whether the US would create a BTC reserve similar to oil reserves (which would be legal), he replied: “Yes, I think so. Yes.”
BREAKING: Ohio Lawmakers Pass Bitcoin Reserve Bill, Allowing States to Buy Bitcoin
However, executive orders are not permanent because they can be overturned by future presidents. The only way to ensure long-term stability for strategic Bitcoin reserves is to pass legislation with majority support.
With Republicans in control of the House and holding a slim majority in the Senate, Bitcoin advocates on Trump’s team have a strong base to push through Lummis’ bill. However, a handful of Republican supporters could veto the bill amid growing anger over the government’s handover of government assets to Bitcoin supporters.
‘Stop comparing this cycle to the previous cycle ‘
Earlier this month, Alex Krüger, an economist and founder of digital asset advisory firm Asgard Markets, said the poll results made him believe “Bitcoin is in a supercycle.”
He believes Bitcoin’s unique situation can be compared to that of gold, when former US President Richard Nixon took the United States off the gold standard, ending the Bretton Woods system, and the price of Bitcoin went from $35 per ounce in 1971 to $850 in 1981. Kruger did not rule out the possibility that Bitcoin could experience a market crash similar to previous crashes. However, he urged crypto investors to “stop comparing this crash to previous crashes” because this time is different.
Trump’s actions so far are a sure sign that good governance will continue to advance. He nominated Paul Atkins to chair the Securities and Exchange Commission after Gary Gensler resigned.
He also nominated pro-cryptocurrency Scott Bessent as Treasury Secretary, and he appointed former PayPal CEO David Sacks as intelligence and cryptocurrency czar, responsible for dealing with the cryptocurrency industry. The supercycle theory is not very productive
However, the “this cycle is different” theme has been present in all Bitcoin bull runs in the past, always supported by stories of global adoption.
During the 2013-2014 bull market, the supercycle theory was supported by the idea that Bitcoin would gain global attention as an alternative to fiat currencies.
In the 2017-2018 cycle, the rapid price appreciation was seen as a sign of mainstream adoption and the beginning of mainstream acceptance of Bitcoin, and corporate interest is growing.
In the 2020-2021 cycle, technology companies such as MicroStrategy, Square, and Tesla will enter the Bitcoin market, believing that many technology-related companies will follow.
However, in each cycle, the supercycle narrative failed to materialize, ultimately causing prices to collapse and eliminating its supporters as they entered a bear market. Su Zhu, co-founder of Three Arrows Capital, is a prominent proponent of the 2021 supercycle theory. He believes that the cryptocurrency market will remain in a bull market without a bear market, and that Bitcoin will eventually reach a peak of $5 trillion.
3AC of course borrowed money, as if the supercycle theory was true, and was eventually liquidated, the cryptocurrency’s market cap dropping by almost 50% after the news broke, a collapse that saw providers including Voyager Digital, Genesis Trading, and BlockFi go bankrupt and face financial difficulties.
Therefore, supercycles are a bad idea worth betting your life savings on.
Chris Burniske, partner at investment firm Placeholder and former head of blockchain products at ARK Invest, also believes that Bitcoin’s supercycle is a myth.
“The Superloop is a very ambitious idea.”
However, the US election results provide a strong and promising precedent for Bitcoin, thanks to the support of the US President, who seems to be keeping his pro-crypto promises, including never selling US Bitcoin in the form of a currency.
global domino effect possible
If the Bitcoin Ban Act passes, it could spark a global race to stockpile the currency, with other countries trying not to be left behind.
In 2016, attorney George S. Georgiades, who moved from advising Wall Street firms on finance to working with the cryptocurrency industry, told Cointelegraph that the implementation of the Bitcoin Reserve Act “will mark a turning point in the Bitcoin adoption landscape,” and that it is likely that other countries and private institutions will follow suit, encouraging widespread adoption and increasing the market’s liquidity.
Basel Ismail, CEO of cryptocurrency investment analysis firm Blockcircle, agreed, calling the agreement “one of the most exciting events in cryptocurrency history” because it “will create a race to get as much Bitcoin as possible.”
‘Other countries will have no say, and will be forced to act. Change and compete or die’
He believes that “most of the G20 countries, the world’s most powerful and economically advanced countries, will follow suit and create their own national reserves.”
Chris Dunn, a veteran crypto investor and Bitcoin expert, told Cointelegraph that this FOMO-driven trading competition between countries could change the current cryptocurrency market cycle.
“If the US and other major economic powers start hoarding Bitcoin, Bitcoin could trigger FOMO, potentially creating a market cycle with supply and demand dynamics that we’ve never seen before.”
OKEx exchange president Hong Fang told Cointelegraph that other countries may be ready for such a competition.
“The game theory may have been born out of thin air.”
However, Ismail said that most Bitcoin purchases are made through OTC brokers and are completed in the form of block trades, so “there is no possibility of any impact on the price of Bitcoin,” but it will create a long-term benefit. . increasing the price of Bitcoin. A New Wave of Investors Could Change the Dynamics of the Cryptocurrency Market
If countries become trading partners, the Bitcoin market could be a completely different story. A new wave of new investors from global financial centers could flood the cryptocurrency market, changing market dynamics, sentiment, and reactions to certain events.
Nexo analyst Kalchev said that while there is still speculation that this regulation could disrupt Bitcoin’s famous half-year cycle, some of the dynamics could change.
Bitcoin is currently a unique market driven by buying and selling, with prices that are highly sensitive to market sentiment. The emergence of new types of investors could change the dynamics of the market and reverse previous trends. Ismail believes that “investors in the stock market behave differently from retail investors who are more focused.” Institutional players have large amounts of money and sophisticated risk management strategies that allow them to do things differently with Bitcoin than retail investors.
Stability is another word for volatility, meaning that the market may not move as much as it has in the past.
Georgiades believes that “price volatility will continue,” but “continuing demand from large buyers like the United States could reduce the volatility and volatility that we have seen in previous cycles.”
Ismail also noted that the Bitcoin market has been performing differently than it has in the past four years. The price of Bitcoin in the current cycle fell below the all-time high (ATH) of the previous cycle, which “everyone thought was impossible”, and before the halving, Bitcoin reached a new all-time high. “The four-year cycle has been opposed and broken many times.”
There are currently only four Bitcoin halvings, and nearly thirty other halvings yet to occur. Kalchev said “it is difficult to imagine that all these halves will follow the four-year pattern,” especially when macro and political factors are involved, such as central bank policies and developments. legal, enter the market of Bitcoin and more. great effect.
Kalchev believes that Bitcoin’s price movements are no longer influenced by internal factors such as halving, but are more influenced by external factors such as corporate takeovers and geopolitical events.
