US Cryptocurrency Reserve Could Boost Bitcoin's Market Cap by USD 460 Billion
The US Strategic National Reserve of cryptocurrencies is capable of increasing the capitalization of BTC by hundreds of billions of dollars. And even if the decision to create a crypto reserve is never made, the widespread controversy about it is a stimulating factor for the growth of the Bitcoin price.
Impact of US Cryptocurrency Reserve on Bitcoin
A research report from Sygnum Bank suggests that the creation of a strategic cryptocurrency reserve in the United States will lead to exponential growth in Bitcoin’s market capitalization. The bank estimates that the move would add $460 billion to Bitcoin’s market capitalization, a 25% increase from current levels.
The Role of Institutional Investments
Sygnum’s Head of Investment Research Katalin Tischhauser notes that Bitcoin’s limited supply makes it susceptible to large injections of investment. She points out that institutional investment already has a noticeable price impact on Bitcoin, with each $1 billion investment through an ETF capable of driving the price up by 3-6%.
If state and federal governments in the United States start buying Bitcoin, this effect could be amplified, driving the cryptocurrency’s value even higher.
Political Support and Legislative Initiatives
On March 2, US President Donald Trump backed the idea of creating a national cryptocurrency reserve that would include Bitcoin, Ethereum, Solana, XRP, and Cardano. The idea is similar to the BITCOIN Act, a bill proposed in July 2024 by Senator Cynthia Lummis that would create a reserve based solely on Bitcoin. While there has been support in some states, five have already rejected similar ideas for regulatory and economic reasons.
Possible Status for Bitcoin
Commerce Secretary Howard Lutnick has said that Bitcoin could receive special status in the proposed national digital asset strategic reserve, separate from other altcoins. Of course, there are real legislative and regulatory hurdles that need to be overcome before something like this can be implemented.
Tischhauser says that while the market sees a relatively low probability of a national Bitcoin reserve forming, any positive progress in that direction would be positive for the number one cryptocurrency.
Challenges and Uncertainty
Congressional approval remains a major hurdle, as previous cryptocurrency proposals have failed in Washington. If the Trump administration decides to move forward with the plan without Congress, the reserve will function more as a government investment in the space than as a strategic asset.
The White House is likely to reiterate its position and provide more details on the plan at the Cryptocurrency Summit on March 7, 2025.
Market Outlook
If a national Bitcoin reserve is created, institutional investors could lead the government in accumulation schemes, sending Bitcoin’s price skyrocketing. If Congress slows down, the impact on price will be gradual, with a bias toward long-term accumulation plans. If the reserve idea is scrapped, Bitcoin will continue to trade in line with ETF demand, macro trends, and retail interest.
Conclusion
While a U.S. strategic cryptocurrency reserve is still in the realm of possibility, even considering this possibility adds to the rationale for Bitcoin as a reserve asset. It is not yet known whether this plan will be approved, but any confirmation of it at the crypto summit on March 7 will be the signal that will trigger the next Bitcoin price surge.