After introducing a bill to allow the United States to acquire 1 million bitcoins, Senator Cynthia Lummis proposes financing these purchases with gold. Will this project see the light of day?
1 million bitcoins for the United States reserve: how to carry out such a project?
A strategic reserve in Bitcoin (BTC): this was one of Donald Trump's campaign promises. In reality, the idea did not come from him, but from Wyoming Senator Cynthia Lummiswhich already in February 2022 encouraged the Federal Reserve (FED) to buy Bitcoin.
???? Investing in Bitcoin (BTC) step by step
Last July, the senator took an additional step, by submitting a bill which would allow the United States to acquire 1 million bitcoins. For several days, the person concerned has reiterated his desire to have this famous “Bitcoin Act” adopted, during the first 100 days of Donald Trump’s future mandate. Last night, she indicated that the country had the team for this:
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To date, the United States government already has over 200,000 BTC from seizures. The Bitcoin Act would allow them to keep them and acquire 200,000 additional bitcoins per year until reaching one million units. Thus, this would represent approximately 5% of the capitalization of the asset, or more than $87 billion at current prices.
In addition, this reserve would be subject to a minimum holding period of at least 20 years.
In an interview with Bloomberg, Cynthia Lummis considers that the country already has the necessary means to carry out such a project:
We already have the financial assets in the form of gold certificates to convert into bitcoins. The effect on the American balance sheet is therefore fairly neutral.
If the amounts involved seem enormous, let us remember that a private actor such as MicroStrategy managed to acquire 279,420 BTCand continues to grow this cash flow.
Among the opposition to this project, Jennifer J. Schulp of the Center for Monetary and Financial Alternatives said:
This continues to put government money on the line, and Bitcoin has not proven to be a particularly stable asset.
With a price multiplied by 10 in 5 years, we cannot actually deny this statement. Moreover, Michael Novogratz, CEO of Galaxy Digital, considers that if the United States carries out this project, it would create buying pressure which could propel the price of BTC to $500,000.
???? Also in the news — Pennsylvania could become the first US state to adopt Bitcoin as a reserve asset
At the time of writing, one bitcoin is trading at around $87,000, down 3% in the last 24 hours.
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Source : Bloomberg
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Since 2021, I have devoted my free time to seriously educating myself on cryptocurrencies in order to acquire maximum knowledge and credibility. I often have the opportunity to conduct interviews with influential figures in the blockchain industry. I also conduct in-depth analyzes on Web3 themes to offer exclusive content to Cryptoast readers.
Vincent Maire
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