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The Bitcoin Act’s passage could eventually send BTC’s price past $1 million per coin, industry executives say.
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Establishing a strategic Bitcoin (BTC) reserve in the United States would accelerate Bitcoin’s adoption even more than 2024’s exchange-traded fund (ETF) launches, cryptocurrency researcher CoinShares said in a Jan. 10 blog post.
In 2024, US lawmakers proposed the Bitcoin Act, which would direct the US Treasury Department to create a “strategic Bitcoin reserve” by purchasing 1 million BTC over a 5-year period. President-elect Donald Trump endorsed the plan, which has not yet been passed into law.
“We believe that the enactment of the Bitcoin Act in the United States would have a more profound long-term impact on Bitcoin than the launch of ETFs,” CoinShares said.
CoinShares said “numerous interactions with institutional clients” showed that Bitcoin’s “credibility” as an asset class remains a primary barrier to institutional BTC adoption.
Passing the Bitcoin Act “would significantly diminish the stigma faced by institutional investors” by “effectively granting Bitcoin the endorsement of the world’s largest government,” the post said.
ETF inflows correlate closely to BTC’s performance. Source: Sygnum Bank
Related: Bitcoin analysts explain why BTC could avoid a drop under $90K
Gaining traction
Introduced in July by US Senator Cynthia Loomis, the Bitcoin Act has gained traction since the November US elections, where members of Trump’s Republican political party gained control of the Senate.
Several US states — including New Hampshire and North Dakota — also floated bills to create BTC reserves.
The proposed bills follow US regulators’ January 2024 approval of nearly a dozen spot BTC ETFs. The funds broke $100 billion in net assets for the first time in November, according to data from Bloomberg Intelligence.
Crypto analysts at Steno Research expect BTC ETFs to see additional net inflows of $48 billion in 2025.
Surging institutional inflows could cause positive “demand shocks” for Bitcoin, potentially sending BTC’s price soaring in 2025, asset manager Sygnum Bank said in December.
Passing the Bitcoin Act would accelerate this further, eventually pushing BTC’s spot price past $1 million per coin, said Adam Back, co-founder and CEO of Blockstream.
“Combined with other governments following suit, such a development could catalyze a much larger flow of assets into Bitcoin in the years to come,” CoinShares said.
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This article first appeared at Cointelegraph.com News
