The possibility of a Bitcoin Strategic Reserve will be discussed this week by the United States government. It could be a step to further mainstream adoption of the cryptocurrency. We discuss the possible impact it may have below.
The last week in February was poor for Bitcoin. It hit new lows, meaning anyone who had bought in 2025 would have been down on their investment. However, a possible revival of a strategic reserve in the US has sent the price upwards, adding 20% to its value. A range of altcoins also mentioned in the concept also took a step upwards. The world’s largest crypto boomed by a fifth from its lows in November. On Friday, it had been valued at around $78,273. By Monday, it had risen to $91,605 to start the month.
Bitcoin Price Jumps 20%
All of this was centred around an announcement on Truth Social. This said at the heart of any Strategic Reserve would be Bitcoin and Ether. However, it will also possibly include XRP, Solana and Cardano. The first two of these had gains of around 30% from their Friday levels, and Cardano added a massive 60%. Even Ether managed to boom by 20%, following a disappointing few months. At the time of writing, the latest Bitcoin price is $ 92,612.89.
The market cap of cryptocurrency is now above $3 trillion. This week, an Executive Order on Digital Assets will be discussed by the Presidential Working Group. This will include figureheads from the crypto industry and the government. They will work on the Crypto Strategic Reserve, which will include all of the above.
Many are discussing the possibility of a rush toward a crypto arms race. As other countries try to keep up with the US, it could trigger a race to amass the currency. This will mean the market could be scheduled for gains the likes of which have never been seen before. Some are predicting a price of $200,000 by the end of the year.
What Is a Strategic Reserve?
A strategic reserve is an asset, commodity or capital that is not used in the running of a government and its economy. Instead, it is held back and reserved. They come in many different forms. For example, the Svalbard Global Seed Vault holds plant seeds in case of environmental disaster and is considered a strategic reserve. Countries may employ similar strategies with items needed for them to function, such as wheat and oil.
These items can be released to deal with serious disruptions in supply. For example, during oil embargos, the US has been known to release goods from its strategic oil reserves. However, as a digital token, Bitcoin will serve a very different purpose. This is because it is not a crucial commodity like oil or wheat. Probably, its closest asset class is gold. This is used to provide financial stability and support the US dollar. It is assumed that Bitcoin would act in the same way, being an asset that would provide monetary support and be a financial hedge.
Voices Against a Bitcoin Reserve
Strategic reserves are seldom created and this would be the first built for any sort of digital asset. This has led to many having some serious questions about how this would work. Would it replace the gold reserve and what impact would this have on the US dollar? Finally, Bitcoin is inherently volatile. This is now known as one of its biggest strengths and weaknesses. How would the United States deal with this, and could it impact its fiscal policies elsewhere in the world?
The weekend was also not one that was solely focused on a possible strategic reserve. Spot Bitcoin ETFs saw some of their biggest sell-offs, which may have amounted to the gradually declining price of Bitcoin. This was because of unwinding basis trades, along with a February future expiry which is now gone.
Not all voices have been unanimous in accepting a Bitcoin strategic reserve, even for those within the community. Peter Schiff is one of these people, who once actually backed the idea. However, he has now come out to say that the concept is simply a ploy designed to inflate its value.
This came in response to news of the reserve, which will allegedly include Bitcoin, Ether, SOL, Cardano and XRP. It was the latter of this list that Schiff questioned on social media, asking why it was included. He also said that proponents of Bitcoin reserves had been twisting his words to add legitimacy to the plot.
The short-term future of Bitcoin will reside in Friday’s meeting. However, even if nothing comes of this, the mere discussion shows further acceptance of Cryptocurrency in mainstream finance. This is a strong indicator of long-term growth, so for those in for the long haul, now is as good a time as ever to buy.
Lucas Bennett is a Tech expert and enthusiast. Simplifying complex concepts with insightful analysis and practical advice. Trusted source for breaking tech news, product reviews, and tutorials.
