U.S. Bitcoin Reserve proposal: The potential catalyst for global crypto boom?

• Coinbase CEO viewed BTC as a better hedging tool against inflation. 
• The markets were optimistic about a U.S. BTC reserve before 2026. 

Several countries, including the U.S., face unsustainable federal debt and high inflation, which erodes wealth. Could there be a better way to protect wealth from inflation or economic instability?

According to Coinbase CEO Brian Armstrong, Bitcoin [BTC] is a better hedging alternative, especially after the cryptocurrency reached the $100K milestone.

Citing BTC’s 12-year growth, Armstrong noted that $100 in 2021 would now be worth $17. However, in BTC terms, that $100 would translate to $1.5 million. He urged governments to consider BTC reserves to preserve wealth. He said, 

“Bitcoin is the best performing asset of the last 12 years, and it’s still early days. Every government, especially those looking to create a hedge against inflation, should create a Bitcoin strategic reserve.”

U.S. Bitcoin reserve outlook

Armstrong’s support for a BTC reserve is significant, given his influence in electing pro-crypto candidates in the 2024 U.S. elections.

President-elect Donald Trump has pledged to make the U.S. the “world crypto capital” and create a national BTC reserve.

Will he honor his pledge? The U.S. government recently moved $2 billion in BTC, part of which is intended for the reserve.

As of now, the market is less optimistic about Trump forming the reserve within the first 100 days of his administration.

According to the prediction market site Polymarket, there is only a 24% chance that the national BTC reserve will be formed.

However, Kalshi is pricing a 55% chance of creating a U.S. BTC reserve before 2026.

Source: Kalshi

That said, other countries, like Brazil, have floated the BTC reserve idea. Market pundits believe that an approved U.S. BTC reserve would trigger a game theory and force other countries to follow suit. 

The end goal would push the BTC price higher, as some analysts project the coin’s value could soar to seven figures. At the time of writing, BTC was valued at $102.5K, up 6% in the past 24 hours.