Galaxy Digital’s Research Division Predicts US Government Will Not Buy Bitcoin in 2025, But Safeguard Existing Supply
The United States government is unlikely to purchase any additional Bitcoin in 2025, according to a recent report by Galaxy Digital’s research division. Instead, the government will focus on creating a stockpile using its existing supply of Bitcoin.
US Government’s Current Bitcoin Holdings
According to data from Spot On Chain, the US government currently holds approximately 183,850 Bitcoin worth around $17.36 billion across various known addresses. This large cache of Bitcoin is spread across 36 different addresses, highlighting the significant presence of digital currency within the government’s coffers.
Wyoming Senator Cynthia Lummis’ Proposed Bitcoin Act
One potential development that could impact the US government’s stance on Bitcoin is the proposed Bitcoin Act 2024 by Wyoming Senator Cynthia Lummis. If passed, this legislation would enable the government to insert Bitcoin into its treasury as a reserve asset by purchasing 200,000 BTC annually over five years, ultimately accumulating 1 million Bitcoin. These coins would then be held for at least 20 years, providing a long-term commitment to digital currency.
Potential Adoption of Bitcoin by Other Nations
Galaxy’s research also suggests that other nations may follow suit and adopt Bitcoin as a reserve asset. In fact, the analysts predict that up to five Nasdaq 100 companies and five nation states could add Bitcoin to their balance sheets or sovereign wealth funds in the coming years. This increased adoption is expected to drive competition among countries, particularly those with large sovereign wealth funds or adversarial relationships with the US.
Japan’s Prime Minister Shigeru Ishiba on Bitcoin Adoption
Not all nations are as optimistic about adopting Bitcoin reserves, however. On December 26, Japan’s Prime Minister Shigeru Ishiba expressed his difficulties in understanding the movements of countries like the US regarding Bitcoin adoption. He noted that it is challenging for governments to express their views on this topic.
Former Binance CEO Changpeng ‘CZ’ Zhao on China’s Potential Adoption
In contrast, former Binance CEO Changpeng ‘CZ’ Zhao believes that smaller countries will likely be the first to adopt a Bitcoin reserve, with China being one of the key players. At the Bitcoin MENA conference in Abu Dhabi on December 9, Zhao expressed his confidence that these nations would take a strategic approach to digital currency adoption.
Potential Impact on Global Markets
The potential adoption of Bitcoin by nation states could have significant implications for global markets. As countries begin to accumulate and hold large quantities of digital currency, the price of Bitcoin is likely to experience fluctuations. Furthermore, this trend may spark a "race" among nations to acquire or mine Bitcoin, driving up demand and potentially leading to further price appreciation.
Why the US Government Will Not Buy More Bitcoin in 2025
According to Galaxy’s research head Alex Thorn, the US government will not purchase any additional Bitcoin in 2025. Instead, it will focus on creating a stockpile using its existing supply of Bitcoin. Thorn explained that there may be some movement within departments and agencies to examine an expanded Bitcoin reserve policy, but no new purchases are anticipated.
Implications for Investors
The predictions made by Galaxy’s research division offer valuable insights for investors in the digital currency space. While the US government is unlikely to purchase more Bitcoin in 2025, the creation of a stockpile using existing coins may have positive implications for prices. Furthermore, the potential adoption of Bitcoin by other nations and companies could drive demand and lead to further price appreciation.
Conclusion
The future of Bitcoin adoption by nation states is complex and multifaceted. While some countries like Japan’s Prime Minister Shigeru Ishiba seem uncertain about their stance on digital currency, others such as China are more confident in its potential. The predictions made by Galaxy Digital’s research division offer a glimpse into the possible trends that may shape global markets in 2025.
Recommendations for Investors
For investors looking to capitalize on these trends, it is essential to stay informed about the latest developments in digital currency adoption. By monitoring government policies and international events, you can make more informed decisions about your investments. Additionally, consider diversifying your portfolio to include a range of assets, including Bitcoin, to minimize risk.
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By following these recommendations and staying informed about the latest developments in digital currency adoption, you can make more informed decisions about your investments and potentially capitalize on the growth of Bitcoin as a global reserve asset.
