The US authorities reportedly has plans to purchase 1 million Bitcoin
however why? In this video, we discover the workable motives, from strengthening the greenback to hedging in opposition to monetary instability, and what it should suggest for the crypto market.
The main purpose of the US authorities' plan to buy 1 million (1 million) Bitcoin is to create a Strategic Bitcoin Reserve. This initiative is based on the 'Bitcoin Act 2024' proposed by Senator Cynthia Loomis and the support of President Donald Trump.
The main reasons for buying this huge amount of Bitcoin are given below:
Reducing the national debt: The long-term goal is to help pay down America's growing national debt by increasing the value of Bitcoin.
Financial stability and combating inflation: It is planned to use Bitcoin as a "digital gold" as a hedge against inflation and to further strengthen the dollar reserve.
Becoming a crypto superpower: Part of this plan is to maintain America's dominance in the global cryptocurrency market and strengthen its position before other countries.
Reserve diversification: A modern digital asset alongside the existing gold reserves, equivalent to about 5% of the total Bitcoin supply
How will the plan work?
Amount and duration: It is proposed to purchase 1 million Bitcoins, 200,000 per year over the next 5 years
Fundraising: The plan is to use confiscated Bitcoins and the proceeds from the revaluation of the Federal Reserve's gold certificates for this purchase, rather than imposing any new taxes.
Holding period: It is said that these stored Bitcoins will be stored without being sold for at least 20 years.
Although there is currently debate among economists about the market price of Bitcoin and its volatility, this plan is moving quickly towards implementation under the Trump administration.