In a surprising turn of events, the US White House has confirmed that the U.S. Treasury and Commerce Department will be buying Bitcoin to add in the strategic reserve.
The confirmation comes as previously many market participants had questioned the parameters which were decided to establish the US Bitcoin Reserve.
White House Confirms U.S. Plans to Add Bitcoin to Strategic Reserves via Treasury and Commerce
The commitment of the U.S. Treasury and Department of Commerce to buy Bitcoin for the nation’s strategic reserves has been formally verified by the White House.
This historic ruling highlights the rising institutional recognition of Bitcoin as a valued asset and represents a critical step in the US attitude to cryptocurrencies.
The United States hopes to diversify its financial holdings and establish itself as a leader in the use of digital assets worldwide by including Bitcoin in the reserves.
The action also shows that the government sees Bitcoin’s potential as a store of value, much like gold and other conventional assets. Although the purchase strategy’s exact details are still unknown, this choice may act as a spur for additional institutional adoption.
This change also paves the path for wider cryptocurrency integration in financial institutions by indicating that the US government is acting more pro-actively in regulating and integrating digital assets.
Also Read: US Strategic Bitcoin Reserve Will Involve Buying $BTC, Not Just Seized Assets, Says Jan3 CEO
Why Was The Market Doubting Trump’s Crypto Reserve Decision?
Since the US crypto reserve just consists of seized assets and no purchasing, some Bitcoiners claim that the Strategic Bitcoin Reserve is ineffective.
The majority of market players don’t think Trump’s plan to create the Bitcoin Reserve using only the confiscated assets would ever work out.
However, analysts and experienced traders had noted that there will be purchasing for the expansion of Bitcoin reserve. Most predictions included that there are several “budget neutral” methods to purchase Bitcoin, such selling gold or issuing BitcoinBonds.
US Bitcoin Reserve: How Will The New Change Affect The Market?
The administration had previously stated that the reserve would only be financed by Bitcoin that was owned by the federal government and had been taken as part of criminal or civil asset forfeiture procedures.
However, the new change will see the Secretaries of Treasury and Commerce developing budget-neutral strategies for acquiring more bitcoin, as long as the plans don’t result in additional costs for American taxpayers.
Since previously, the doubt of the effectiveness of the US Bitcoin Reserve had dampened investor sentiments, it is likely that the new changes will lift investor sentiments.
It will be determined if other authorities have the legal right to transfer any bitcoin under their possession to the Strategic Bitcoin Reserve. Furthermore, the US will not sell bitcoin placed into the Strategic Bitcoin Reserve; instead, it will function as a store of reserve assets.
Also Read: Global Bitcoin Adoption At 4%, US Tops With 14% Ownership, Report Shows