Bitcoin prices have soared to a record high, climbing over 50% since President-elect Donald Trump’s election. The world’s largest cryptocurrency reached $107,000 for the first time this week as Trump reaffirmed his support for a US bitcoin strategic reserve.
The idea behind a strategic reserve is to hold a substantial amount of bitcoin as a safeguard against emergencies or supply disruptions. Proponents argue that it could diversify the nation’s financial holdings and prevent other countries from dominating the digital currency market. However, critics say that bitcoin’s volatility makes it an unlikely candidate for a strategic reserve.
Experts point out that a US bitcoin strategic reserve would work similarly to the country’s stockpile of oil or gold. It would provide an emergency source of value and help ensure the US plays a significant role in the cryptocurrency market. Some proponents also suggest that holding bitcoin could help pay down the national debt.
However, critics argue that bitcoin lacks the social utility or financial import that would necessitate a strategic reserve. They also warn that a large purchase of the asset could threaten the nation’s financial stability rather than safeguarding it.
Trump’s comments on a US bitcoin strategic reserve have sparked debate among experts and proponents. Some see it as an opportunity to diversify the nation’s financial holdings, while others believe it would be a costly mistake.
The long-term outlook for bitcoin remains uncertain, with some experts warning that its price may not continue to rise.
Source: https://abcnews.go.com/Business/bitcoin-soars-hopes-bitcoin-strategic-reserve-work/story?id=116863315