Bitcoin Could Be Getting Closer to Having a Place at the Government Table

The possibility of Bitcoin having a place at the government table could be getting closer, according to Morgan Stanley. The bank stated that the world’s largest cryptocurrency is now large enough to be held as a reserve asset by the U.S.

One of the reasons why the notion is no longer a fantasy is due to Bitcoin’s $1.07 trillion market capitalization, which is comparable to the market cap proportion that the U.S. holds in other currencies in global reserves.

But there’s a catch. Bitcoin still swings too wildly in price. Its volatility makes it a risky bet, especially when compared to other reserve currencies like the dollar, euro, or yen. While the numbers show it’s growing, stability is still a major issue, as Morgan Stanley pointed out.

US Eyes Strategic Bitcoin Reserve

This development comes as President Trump’s administration is considering adding a Strategic Bitcoin Reserve to the country’s economic agenda. Back in March, the Trump government introduced a new executive order instructing the government to set up a federal institution for holding Bitcoins.

It is being discussed similarly as how gold is deposited with the government in Fort Knox.

According to Morgan Stanley’s perspective, if the U.S. were to maintain between 12% and 17% of the top crypto’s supply, it would be comparable to the treatment of other currencies in global reserves. That would involve sitting on about $370 billion in BTC to equal its international market significance.

Serious report by @MorganStanley. -Bitcoin has sufficient market cap to be a reserve, but is more volatile than other reserve currencies. -Volatility is decreasing. -$370b allocation to bitcoin would reflect market cap proportions. -Reserve of 12%-17% of total bitcoin supply… pic.twitter.com/RfFjdobw5Z

— Troy Cross (@thetrocro) May 6, 2025

The action would potentially put the U.S. ahead of the pack in crypto policy and fortify its financial future, according to backers. Some go so far as to claim it could aid in the national debt.

However, the British government has stepped back from the possibility of holding Bitcoin in reserve.

During the FT Digital Asset Summit, Economic Secretary Emma Reynolds indicated that the government will look at regulating crypto and applying blockchain to public finance — but not holding BTC.

In Switzerland, the central bank made a similar decision: during its annual meeting, Swiss National Bank President Martin Schlegel stated that cryptocurrencies do not provide the long-term protection of value required for reserves.

Abrupt declines in liquidity are one of the primary threats, according to Schlegel.

Whereas Bitcoin enthusiasts can envision the future, money experts reply that price volatility is still too excessive.

Bitcoin supporter Troy Cross admitted the high levels of volatility present make it difficult to label the asset as “reserve ready.” But he also stated that if those fluctuations are below important thresholds, the argument for crypto will be a lot more powerful.