Republican Senator Cynthia Lummis says converting gold reserves into Bitcoin could strengthen the U.S. government’s finances.

In an interview with CNBC, Lummis suggested that the Federal Reserve sell some of its gold reserves, which were valued at 1970s prices, and use the proceeds to buy Bitcoin (BTC).

See the clip below.

Lummis, known for her bullish support of cryptocurrency, believes that creating a strategic Bitcoin reserve could strengthen the dollar’s position as the world’s reserve currency and reduce the country’s debt burden.

She also suggested that Bitcoin, which is edging toward $100,000, could provide high returns.

Bitcoin can be considered a “gold standard digital asset” and creating a strategic reserve would be an essential step in its implementation, Lummis explained.

“We have reserves at our 12 Federal Reserve banks, including gold certificates that could be converted to current fair market value. They’re held at their 1970s value on the books. And then sell them into bitcoin, that way we wouldn’t have to use any new dollars in order to establish this reserve.”

Senator Cynthia Lummis

With the Trump administration’s growing interest in cryptocurrencies, Lummis said that legislation for digital assets could begin to be developed in the coming years.

How the Bitcoin reserve works

The creation of the Bitcoin Strategic Reserve Fund is a comprehensive initiative meant to strengthen financial stability and protect the nation’s assets.

The Bitcoin Strategic Reserve will also act as a secure financial mechanism that allows the government and other agencies to use Bitcoin as a long-term asset.

The reserve will include a decentralized storage network. By creating a decentralized network of secure Bitcoin storage facilities, the U.S. can protect assets from centralized risks and vulnerabilities. Storage facilities will be distributed across different regions, reducing dependence on one location.

Bitcoin purchase program

The government will implement a Bitcoin purchase program, and it is planning to purchase 200,000 BTC per year for five years. The overall goal is to increase Bitcoin’s strategic reserve to 1 million BTC. Purchases will be made regularly to avoid sharp price fluctuations and ensure consistency.

All purchased Bitcoin will be held in the reserve for at least 20 years.

In addition, all Bitcoins currently stored in other government agencies will be transferred to the strategic reserve, which will allow for centralization and efficient asset management. States can voluntarily participate in this reserve by opening segregated accounts to deposit or withdraw their Bitcoin assets as needed.

The initiative will be supported because government agencies cannot confiscate or seize the rights to legally owned Bitcoin assets. This will provide confidence and incentives for Americans to store their Bitcoins independently.

Bitcoin reserves will not solve the U.S. national debt problem

Avik Roy, president of the non-profit think tank Foundation for Research on Equal Opportunity (FREOPP), doubts that creating a strategic reserve in Bitcoin will help the U.S. overcome the debt crisis.

Speaking at the North American Blockchain Summit 2024 in Dallas, Avik Roy said that Lummis’s plan will not help cover the national debt, which has already grown to $35 trillion.

“The Bitcoin reserve is good but does not solve the problem. You still have to actually do the budgetary reforms to get us out of this $2 trillion a year of federal deficits.”

Avik Roy, FREOPP president

According to Roy, even with a Bitcoin reserve, the U.S. would still have to implement budgetary reforms to get the country out of its $2 trillion federal deficit annually.

The political scientist noted that the BTC reserve could ease tensions in the bond market by making it feel like the U.S. is not going broke. Roy is also concerned that the U.S. could abandon its BTC reserves in the future, similar to what happened with gold in the 1970s.

The argument against Lummis

Bitcoin as a reserve asset points to several other challenges, with the biggest being volatility. Bitcoin’s price fluctuations make it a risky reserve asset compared to stable options like gold.

After all, Bitcoin has experienced several notable crashes throughout its history.

• In June 2011, when the Mt. Gox exchange was hacked. Bitcoin’s price dropped from $32 to $0.01 in a single day, a nearly 99.9% collapse.
• December 2017 to February 2018: After hitting a peak of nearly $20,000, Bitcoin lost over 56% of its value within months.
• March 2020: During the onset of the COVID-19 pandemic, Bitcoin’s price fell nearly 46% in less than a month, dropping from $10,300 to about $5,600.
• May 2021: Bitcoin dropped over 40% in two weeks, from $58,000 to $34,700.
• November 2022: Following the collapse of the FTX exchange, Bitcoin experienced a 14% dip in a short period

Bitcoin is also typically associated with illicit activities and discreet purchases, which raises concerns about integrating it into national financial systems​. Critics say it could also enable countries like Russia to bypass international sanctions, undermine global financial stability and create geopolitical tensions.

Trump’s crypto advisory board to create promised reserve

A number of cryptocurrency companies, including Ripple, Kraken, and Circle, are seeking a seat on President Donald Trump‘s promised crypto advisory board, as Reuters reports. They are eager to participate in his plans to overhaul U.S. policy.

During his campaign at a Bitcoin conference in Nashville in July, Trump promised to create a new council as part of a pro-crypto administration. Trump’s team is discussing how to organize and staff the council and which companies should be included.

Potential members include venture capital firm Paradigm and the crypto arm of venture giant Andreessen Horowitz, known as a16z.

“It’s being fleshed out, but I anticipate the leading executives from America’s bitcoin and crypto firms to be represented.”

David Bailey, CEO of Bitcoin Magazine

According to sources, the team is expected to advise on digital asset policy, work with Congress on cryptocurrency legislation, create the Bitcoin reserve promised by Trump, and collaborate with agencies like the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Treasury Department. One source said law enforcement officials and former lawmakers may also be on the board.

A crypto analyst who accurately forecasted the Bitcoin price increase to the $99,000 All-Time High (ATH) has just released a more detailed analysis of his prediction. The analyst shared a chart highlighting crucial technical indicators and price movements that suggest the cryptocurrency could be gearing up for an even higher ATH. 

Analyst Projects $105,000 As The Next Price Target

Weslad, a TradingView analyst, has raised his Bitcoin price forecast, predicting the next upside target at $105,764 as the crypto market bull run gains momentum. The analyst reported that BTC has officially entered the bull market phase, characterized by explosive price increases and positive market sentiment. 

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His recent bullish prediction of the Bitcoin price is grounded on a key technical pattern known as the “Ascending Channel,” which indicates a bullish trend continuation. This chart pattern consists of two upward-sloping trend lines drawn parallel to each other, representing the resistance and support price levels, respectively.

Despite his optimistic outlook for the BTC price, Weslad has revealed that investors should anticipate a corrective move toward the immediate buy-back zone, which would provide an optimal entry point for opportunistic buyers. The analyst has also shared a detailed price chart that highlights the bullish ascending channel and key price levels that Bitcoin could reach in the short-term and long-term.   

Overview Of The Analyst’s Bitcoin Price Chart Analysis

In his 4-hour Bitcoin chart, Weslad visualizes the cryptocurrency’s price action within an ascending channel, highlighting that the BTC is moving upwards within two trendlines. The analyst has provided a detailed roadmap for his $105,764 bullish target for the Bitcoin price.

Weslad highlighted the price range between $91,000 and $92,000 as an “important demand zone,” which acts as strong support where buyers are likely to step in if BTC slips any further. He also revealed that the price level at $94,327.99 has been identified as an ”immediate buy-back zone,” which also serves as an optimal entry point if BTC experiences any corrective pullback in its price. 

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The analyst has also highlighted $97,537 as the “immediate profit target,” suggesting that traders may consider locking in profits at this critical short-term price level. He has also pinpointed the “mid-term target” for the Bitcoin price, highlighting that the $100,334 mid-term level is important for investors holding longer positions.

Lastly, Weslad has highlighted $105,764 as the “projected final target” for Bitcoin, indicating that this may be the ultimate target for the present market cycle. For BTC to reach this bullish price target, it would require only a modest 6.83% increase from its current value. As of writing, the price of Bitcoin is trading at $99,072, marking a 12.73% increase over the past seven days, according to CoinMarketCap.

Featured image created with Dall.E, chart from Tradingview.com

As Bitcoin surges toward the $100,000 mark, touching a new all-time high of $99,655.50, the non-fungible token (NFT) sales volume has shown a drop of 9.6% to $160.9 million.

The global cryptocurrency market capitalization has continued to surge, reaching $3.35 trillion from last week’s $3.03 trillion. This marks a 2% increase over the last day, with Bitcoin (BTC) currently trading at $98,620.

The last week’s NFT sales volume stood at $178.8 million. However, according to recent data from CryptoSlam, the NFT market has seen a pullback.

• NFT sales volume decreased to $160.9 million
• Ethereum (ETH) blockchain leads with $51.3 million in sales (23.07% decrease)
• Bitcoin follows with $44.6 million (25.67% decrease)
• NFT buyers surged by 52.93% to 450,512
• NFT sellers increased by 46.74% to 277,767
• NFT transactions slightly decreased by 1.26% to 1,606,261

Ethereum NFT sales decline by 23.07%

The Ethereum NFT blockchain sales volume fell to $51.3 million this week, marking a 23.07% decrease in the last seven days.

The number of NFT buyers on the Ethereum blockchain grew to 42,157, showing a 31.45% increase.

Bitcoin maintained its second position despite a 25.67% decrease in the last seven days.

According to the data, Bitcoin blockchain’s NFT volume stood at $44.63 million, with wash trading increasing by 46.05% to $1.57 million.

Solana (SOL) secured the third position with $25.8 million, showing resilience with a 6.83% increase during the last seven days.

Polygon (POL) jumped to fourth place with $13.5 million, displaying remarkable growth of 289.66% during the last seven days.

Mythos Chain (MYTH) took the fifth position with $10.7 million in sales, showing a marginal decline of 0.71%.

BRC-20 NFTs maintain market leadership

BRC-20 NFTs continue to lead with $16.6 million in sales volume, despite a 41.39% decrease.

MGGA Hat on Polygon secured second place with $10 million in sales, while CryptoPunks followed with $9.2 million, showing a 60.26% decrease.

The latest data shows that the following NFT collections topped the sales in the last week:

• Uncategorized Ordinals #016 sold for $3,795,420 (39.0083 BTC)
• CryptoPunks #7098 sold for $368,889 (118 ETH)
• CryptoPunks #6285 sold for $339,618 (100 ETH)
• CryptoPunks #3152 sold for $332,825 (98 ETH)
• Autoglyphs #210 sold for $279,868 (90 WETH)