At a recent cryptocurrency convention in Nashville, Tennessee, Donald Trump urged attendees to hold on to their bitcoin holdings. In late July, the Republican presidential candidate gave this speech to a cheering crowd. This speech represents another step in his effort to appeal to crypto-interested voters ahead of the November election. Trump made several campaign promises, most notably proposing the establishment of a state bitcoin reserve.
Trump said that if he becomes president, his administration will implement a policy to seize all of the U.S. government’s bitcoin holdings. Trump also intends to retain 100% of the supply. Trump emphasized that these funds would form the “core of the national bitcoin strategic reserve.”
Trump is not the only advocate of a national bitcoin reserve. US Senator In the snow has legislated for the US government to acquire one million bitcoins. This represents approximately 5% of the total supply. In addition, the independent candidate Kennedy He has suggested a government reserve of four million bitcoins.
One possible application for the US government’s significant bitcoin holdings could be a strategic reserve. However, questions remain about its intended use. Its viability and general acceptance within the broader cryptocurrency market also need to be considered.
Cryptocurrency News: $11.1 Billion Worth of Holdings and Recent Market Crash
The U.S. government holds approximately $11.1 billion worth of cryptocurrency, including 203,239 bitcoin tokens. Data firm Arkham Intelligence reported that this accumulation was the result of criminal seizures, primarily from the Silk Road online marketplace, which authorities shut down in 2013.
With its current holdings, the United States controls about 1% of the global supply of bitcoins. The total supply amounts to about 19.7 million tokens, according to Blockchain.com. Right now, the total supply of bitcoins is capped at 21 million coins.
Compared to major non-state investors, Michael Saylor's MicroStrategy (NASDAQ: MSTR) holds approximately 226,500 bitcoin tokens as of Q2.
Meanwhile, BlackRock’s (NYSE: BLK) iShares bitcoin Trust holds 344,070 tokens.
For its part, Grayscale bitcoin Trust manages 240,140 tokens. These figures come from data provided by bitcoin Treasuries.
Shares of cryptocurrency-related companies listed in the United States fell sharply, as bitcoin fell more than 15% on Monday. This significant drop came after weak economic data from the previous week, which heightened fears of a recession. The data fueled a broad sell-off in high-risk assets.
bitcoin-and-crypto-price-crash/”>Cryptocurrency Miners such as CleanSpark (CLSK.O), Bitfarms, Riot Platforms (RIOT.O) and Marathon Digital (MARA.O) all experienced substantial drops in their share prices. Assets fell between 12% and 25% at the start of the trading session.
Additionally, Coinbase (COIN.O) stock price plummeted by 18%. Meanwhile, MicroStrategy (MSTR.O), a major bitcoin buyer, suffered a drop of almost 23%.
Meanwhile, bitcoin fell to its lowest level in almost six months and Ether plunged 19%, hitting its lowest point since January.
Changes in the world of cryptocurrencies: Trump's support for bitcoin and market volatility
This drop represents a drastic change from the positive momentum the sector had recently experienced. Until now, the approval of exchange-traded funds (ETFs) had driven optimism in the market. These assets, for example, are highly dependent on the spot prices of bitcoin and ethereum. These two cryptocurrencies had been the focus of considerable enthusiasm.
Donald Trump's recent endorsement of cryptocurrencies at a bitcoin conference temporarily boosted market sentiment. However, disappointing data on rising unemployment and weak manufacturing activity soon put pressure on riskier assets.
Bernstein analyst Gautam Chhugani noted that bitcoin’s sharp price move was not a surprise given its status as the only functioning market over the weekend. He noted that there were no new adverse developments affecting Cryptoverse’s ICO.
Looking ahead, both bitcoin and the broader cryptocurrency market will likely respond to macroeconomic indicators and election events for most of the third quarter.
A government reserve of bitcoins could greatly improve the value of bitcoin. This effect would likely occur because a digital asset has a very limited supply, especially assuming the role of a reserve commodity is unprecedented. However, this reserve could also reduce the number of tokens available for trading.
On the other hand, such a limitation could expose investors to risks in the event that the government decides to sell part of its holdings.
National bitcoin Reserves: Impact and Market Reactions
Other countries also hold significant reserves of bitcoins. For example, China, the second-largest government holder, holds 190,000 coins, according to bitcoin Treasuries.
While the concept of a national bitcoin reserve remains speculative, experts are actively exploring its potential impact.
Alternatively, the Fed could oversee Treasury reserves, similar to how it manages gold. Another option would be for the reserve to function like the Strategic Petroleum Reserve, with control distributed between the president and Congress.
There is a certain irony in this scenario that worries many staunch bitcoin advocates. The concept of a decentralized, government-free digital asset could become part of a state-controlled reserve.
Despite the uncertainty surrounding a national bitcoin reserve, many in the cryptocurrency market welcome the attention. Investors see it as a boon for their industry. Observers are speculating about the possible structure and implications of such a reserve.
Raoul Mewawalla, CEO of Mawson Infrastructure Group, noted that both political parties are increasingly focusing on digital assets. His company, which runs data centers for bitcoin mining, reflects this growing industry trend. Therefore, the overall market signal remains positive.
Amidst these developments, there is growing optimism in the cryptocurrency world as the increasing focus of political parties on digital assets indicates a bright future for bitcoin and the cryptocurrency market in general. Currently, the market anticipates this trend to persist after the November elections.
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