Analysts from the investment firm Bernstein believe that Bitcoin (BTC) and related assets are on the verge of the next phase of a bull market. Their report states that the current growth began in the fourth quarter of 2023 when expectations of the approval of spot Bitcoin ETFs in the US pushed the asset’s price from $25,000 to $46,000 by the time the funds launched on January 11, 2024.
Following this, a wave of institutional investments through the newly introduced ETFs became a new catalyst, helping Bitcoin reach an all-time high of around $74,000. Later, the market was further influenced by Donald Trump’s victory in the US presidential election in November. He made several statements in support of cryptocurrencies and Bitcoin, promising to turn the US into a global hub for digital assets, create a national Bitcoin reserve, and develop a favorable regulatory framework. These factors led to another Bitcoin record of approximately $109,000 on Trump’s inauguration day.
National Bitcoin Reserve
According to Bernstein, the next crucial stage will be implementing the initiative to create a national Bitcoin reserve, overseen by a cryptocurrency task force led by David Sacks. Experts believe that the US could finance this reserve using funds from the Federal Reserve (Fed) or the Treasury Department. However, if the Fed is involved, legislative approval would be required, which could be achieved through the passage of a new bill.
Bernstein suggests that funding the reserve could also be done by selling part of the US gold reserves or utilizing government debt. Additionally, the fund could receive Bitcoin confiscated by the government, estimated to be worth around $20 billion. Analysts believe this could trigger a global race among central banks and national funds to acquire Bitcoin.
According to analysts at the Bitwise exchange, nearly 70% of Bitcoin is held by private individuals.
