Bitcoin
Senator Lummis wants to replenish Bitcoin reserves with gold
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1 month agoon
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adminRepublican 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.
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Bitcoin
Macro Guru Raoul Pal Predicts Crypto Market Will Rally ‘Pretty Strongly’ Into Year-End – Here’s His Outlook
Published
17 hours agoon
December 24, 2024By
adminFormer Goldman Sachs executive Raoul Pal believes that the crypto market will rally heading into the end of 2024.
In a new interview with crypto trader Scott Melker, the macro guru says that based on historic precedence, Bitcoin (BTC) and other digital assets may put up larger gains during the last week and half of December.
A rally at this time of year is often referred to as a Santa Claus rally, a financial term used to describe a calendar effect on traditional equities that historically have gone up on the last five market trading days of the year in December and the first two trading days of the new year.
“Normally, what happens at this phase is we should rally into year-end pretty strongly in everything. But then the real game gets played in first quarter.”
Pal also believes that the most explosive rally of the current market cycle is still to come and that it could occur next year, possibly around the Fed’s meeting in March when rates may be cut.
“I think my next phraseology is going to be the banana singularity, that’s when everything goes bananas…
So we’re not at the banana zone singularity point yet. That will come as well. That’s probably sometime Fed March when it all gets silly.”
However, Pal also warns there may be a temporary correction around the end of the year after a rally due to liquidity tightening. He believes the growing money supply is a catalyst for Bitcoin price, and that when it declines so does the flagship crypto’s price.
“Let’s look at the last [US President Donald] Trump administration. So from September to the end of the year, the dollar rallied. September to the end of the year, rates went up. Same narrative. It was all about tariffs and what’s he going to do and how’s it going to play out.
Almost exactly as the year turned, the dollar went lower, the rates went lower. So I’ve been producing a chart showing that global liquidity tightened and it has a 10-week lead time, and that should mean that at the end of the year, we get a correction.”
Bitcoin is trading for $94,367 at time of writing, down more than 11% in the last seven days.
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Bitcoin
Metaplanet Bitcoin Reserves Grow With Fresh $61 Million Purchase
Published
1 day agoon
December 24, 2024By
adminJapan-based early-stage investment firm Metaplanet continues its Bitcoin (BTC) buying spree. The company announced today that it has purchased 619.7 BTC for $61 million – including fees and other expenses – making it the firm’s largest Bitcoin acquisition to date.
Metaplanet Increases BTC Holdings To 1,762
The recent crypto market downturn from its all-time highs (ATH) does not appear to bother Metaplanet, as the Tokyo-listed firm made its largest BTC purchase to date, buying 619.7 BTC worth $ 61 million at an average price of around $96,000.
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To recall, Metaplanet started buying BTC earlier this year in May with a purchase of 97.9 BTC. Since then, the company has purchased BTC every month, barring September, and crossed the 1,000 BTC milestone in November. The latest acquisition has pushed Metaplanet’s total Bitcoin holdings to 1,762, bought at an average price of $75,600 per BTC.
Notably, this $61 million purchase is nearly double the value of Metaplanet’s previous largest acquisition, which occurred in November and was worth close to $30 million. The company’s consistent BTC accumulation has earned it the nickname “Asia’s MicroStrategy,” in reference to the US-based business intelligence firm known for its aggressive Bitcoin buying strategy.
It is worth highlighting that today’s BTC purchase comes a week after Metaplanet raised $60.6 million through two tranches of bond issuance for the purpose of “accelerating BTC purchases.” Metaplanet’s latest purchase also makes its BTC reserves the 12th-largest among publicly listed firms globally.
According to Metaplanet’s official announcement, its BTC Yield – a proprietary metric used to measure the performance of its Bitcoin acquisition strategy – stood at 310% from October 1 to December 23. The firm emphasized that this strategy is designed to be “accretive to shareholders.”
Despite today’s significant BTC purchase, Metaplanet’s stock price saw little movement, closing at $22.5, down 0.98% for the day. However, on a year-to-date basis, the company’s stock has surged by an astounding 1,982%, reflecting the long-term benefits of its Bitcoin-centric strategy.
Bitcoin Supply Crunch To Hasten Adoption?
With Bitcoin’s total maximum supply capped at 21 million, the digital asset has solidified its reputation as an inflation-resistant store of value. A recent report highlights that BTC supply on crypto exchanges has hit multi-year lows, indicating that holders are increasingly withdrawing BTC from exchanges, reducing circulating supply and potentially driving prices higher.
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Bitcoin’s scarcity has triggered an unofficial race among corporations – and possibly even governments. For instance, Bitcoin mining firm Hut 8 recently purchased 990 BTC for $100 million, increasing its total holdings to over 10,000 BTC. Similarly, MARA, another Bitcoin mining company, acquired 703 BTC earlier this month, bringing its total holdings to 34,794 BTC.
Speculations surrounding a potential US strategic Bitcoin reserve are further strengthening BTC’s supply crunch narrative, which may fast-track its adoption. At press time, BTC trades at $94,003, down 1.5% in the past 24 hours.
Featured image from Unsplash, charts from Yahoo! Finance and Tradingview.com
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Robert Kiyosaki Hints At Economic Depression Ahead, What It Means For BTC?
Published
2 days agoon
December 23, 2024By
adminRich Dad Poor Dad author Robert Kiyosaki has issued a stark warning while hinting towards an economic depression ahead. In a recent X post, the renowned author said that the global market crash has already started, as he predicted earlier, which indicates that the financial market might enter a “depression” phase. Notably, this comes as the crypto market records immense volatility, sparking concerns over what’s next for Bitcoin (BTC).
Robert Kiyosaki Hints At Economic Depression Ahead
Robert Kiyosaki, in a recent X post, has revealed a stark warning of a looming economic depression. The Rich Dad Poor Dad author warned that a global market crash has already begun, citing Europe, China, and the U.S. as regions facing significant downturns.
In his post, Kiyosaki urged caution, advising individuals to safeguard their finances and maintain their jobs. “Global crash has started. Europe, China, USA going down. Depression ahead?” he asked while emphasizing the enduring value of assets like gold, silver, and Bitcoin. He added, “For many people, crashes are the best times to get rich.”
This warning aligns with Kiyosaki’s earlier prediction of what he called the “biggest crash in history.” Earlier this month, he encouraged his followers to prepare for financial turmoil, stating, “Please be proactive and get rich… before the BOOMER’s go BUST.”
However, this recent comment from Robert Kiyosaki indicates his sustained confidence in BTC. As the crypto market faces heightened volatility, Bitcoin could emerge as a hedge against traditional market instability, he noted. Besides, it also indicates that the flagship crypto, alongside gold and silver, might continue to gain traction amid this economic turmoil.
What’s Next For BTC?
Bitcoin price today has continued its volatile trading, losing nearly 1.5% over the last 24 hours to $95,323. The crypto touched a high and low of $97,260 and $93,690 in the last 24 hours, showcasing the highly volatile scenario in the market.
In addition, the US Spot Bitcoin ETF also recorded significant outflow, with BlackRock Bitcoin ETF witnessing its largest outflux since its launch. This has weighed on the investors’ sentiment, sparking concerns over a waning institutional interest.
However, despite that, many experts remained confident on the asset’s future trajectory. For context, in a recent X post, Peter Brandt shared a new BTC price target, indicating his confidence in the digital asset.
On the other hand, institutions like Metaplanet have also continued to boost their BTC holdings. These moves indicates that the institutions, as well as many investors, are bullish towards the long-term potential of the crypto. Besides, as Robert Kiyosaki said, the recent dip also provides a buying opportunity to investors, which might further boost Bitcoin to its new ATH ahead.
Rupam Roy
Rupam is a seasoned professional with three years of experience in the financial market, where he has developed a reputation as a meticulous research analyst and insightful journalist. He thrives on exploring the dynamic nuances of the financial landscape. Currently serving as a sub-editor at Coingape, Rupam’s expertise extends beyond conventional boundaries. His role involves breaking stories, analyzing AI-related developments, providing real-time updates on the crypto market, and presenting insightful economic news.
Rupam’s career is characterized by a deep passion for unraveling the complexities of finance and delivering impactful stories that resonate with a diverse audience.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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