David Edwards
The research division of Galaxy Digital recently released a paper predicting that the US government will not buy any more Bitcoin in 2025. As per the blockchain analytics firm Spot on Chain, the government is anticipated to prioritize safeguarding its current assets, which total around 183,850 Bitcoin and are worth $17.36 billion.
“In 2025, the US government will not buy Bitcoin,” said Alex Thorn, head of research at Galaxy Digital. Thorn pointed out that while maintaining present reserves, federal agencies may start developing a more comprehensive Bitcoin reserve policy.
Analyzing a Reserve Policy for Bitcoin
Thorn pointed out that talks for extending a Bitcoin reserve policy might be started by “movement within departments and agencies.” If legislation initiatives like Senator Cynthia Lummis’ Bitcoin Act 2024 from Wyoming move forward, these conversations might pick more steam.
By making Bitcoin a reserve asset, the proposed bill would enable the US Treasury to buy 200,000 BTC every year for five years. With this proposal, a national reserve of one million bitcoin would be stored for a minimum of twenty years.
Possible Effect on Worldwide Adoption
According to another Galaxy expert, “JW,” a more assertive U.S. position on Bitcoin would lead to a worldwide competition among countries to mine or amass the cryptocurrency.
“Competition among nation states, particularly unaligned nations, those with large sovereign wealth funds, or even those adversarial to the United States, will drive the adoption of strategies to mine or otherwise acquire Bitcoin.”
Global Views
Shigeru Ishiba, the prime minister of Japan, recently voiced concerns on changes in the global Bitcoin reserve, highlighting the necessity for more research before deciding on a course of action. On the other hand, smaller countries may adopt Bitcoin reserves before larger ones, according to Changpeng “CZ” Zhao, the former CEO of Binance. Although the transition would be slow, Zhao said at the Bitcoin MENA conference that some governments will eventually include Bitcoin in their reserves.
The strategic significance of Bitcoin in influencing sovereign policies is emphasized in Galaxy’s research. The cryptocurrency may change from a speculative asset to a crucial reserve component as the U.S. and other countries assess their positions, impacting geopolitical alignments and fiscal agendas.
