A Bitcoin Reserve Act May End Crypto's 4-Year Boom-Bust Cycle

The Bitcoin Reserve Act may disrupt the halving cycle. Will this four-year cycle unfold differently? Are we entering a mythical supercycle?

A bill in the U.S. Senate that would require the government to hold one million Bitcoins could trigger a massive buying spree by countries around the world, fundamentally altering the cryptocurrency market cycle.

The Bitcoin Reserve Act, introduced by Wyoming Senator Cynthia Lummis earlier this year, would mandate the U.S. government to begin purchasing 200,000 Bitcoins annually over five years, accumulating a total of one million Bitcoins, which the government would then be required to hold for at least 20 years.

If passed, the bill would mark a historic shift in U.S. government policy toward cryptocurrencies, effectively banning the government from selling any Bitcoins it acquires. The government would also be barred from using any BTC it holds to pay outstanding debts.

However, while the bill has garnered support from some lawmakers and industry figures, its fate remains uncertain. Several Republican defectors could block the bill's passage, arguing that it funnels government wealth to Bitcoin holders.

Despite the bill's shaky prospects, its introduction has sparked speculation about a potential global race to acquire Bitcoin, with other countries under pressure to keep up.

“If the U.S. starts buying Bitcoin, other countries will have no choice but to follow suit,” said George S. Georgiades, a lawyer who left advising Wall Street firms in ことにしました 2016 to work in the crypto industry.

“The enactment of the Bitcoin Reserve Act will mark a turning point in global Bitcoin adoption and could trigger other countries and private institutions to follow suit, driving broader adoption and enhancing market liquidity.”

Basel Ismail, CEO of crypto investment analysis platform Blockcircle, echoed Georgiades' sentiments, calling the approval of the bill “one of the most exciting events in crypto history.”

“It will catalyze a race to acquire as much Bitcoin as possible. Other countries will have no say; they will be forced to act. They will either pivot, compete, or perish.”

“Most G20 countries, which are the most powerful and economically advanced countries in the world, will follow suit and establish their own reserves.”

According to Ismail, this FOMO-driven buying spree by countries could fundamentally alter the current cryptocurrency market cycle.

“If the U.S. or any other major economic power starts buying, it could trigger FOMO, creating a market cycle and supply-demand dynamics that we have never seen before.”

Hong Fang, president of OKX exchange, told Cointelegraph that other countries may already be preparing for such a race.

“The game theory has likely already been quietly at play.”

However, Ismail noted that most Bitcoin purchases would be made through over-the-counter brokers and settled in bulk trades, so “it may not have a direct impact on Bitcoin's price,” but it will create a lasting demand force that ultimately drives up Bitcoin's price.

If the U.S. or any other major economic power begins accumulating, it could trigger FOMO, creating a market cycle and supply-demand dynamics that we have never seen before.

Hong Fang

OKX exchange president

If the U.S. or any other major economic power begins accumulating, it could trigger FOMO, creating a market cycle and supply-demand dynamics that we have never seen before.

OKX exchange president