The post Senator Lummis’ Bitcoin Bombshell: Could Crypto Replace Gold in the US Treasury? What To Expect? appeared first on Coinpedia Fintech News
In a recent video analysis, Aaron Arnold of Altcoin Daily highlights how the Bitcoin under the Bitcoin Strategic Reserve bill, led by Senator Cynthia Lummis could become a crucial asset for the US Treasury, boosting the economy and global standing.
The next few months could be crucial—Read on why Lummis’ bold initiative matters!
Bitcoin as a Strategic Reserve Asset
Like gold, Bitcoin could serve as a vital reserve asset for the US. At the recent Bitcoin 2024 conference in Nashville, independent candidate Robert F. Kennedy Jr. promised to direct the US Treasury to purchase 500 Bitcoin daily until it had amassed at least 4 million. This strategy, he claimed, would secure the US a dominant position that no other country could challenge.
While Donald Trump promised a national Bitcoin stockpile. Sources familiar with the draft legislation indicate that a key aspect of Lummis’ bill is its potential to strengthen the U.S. dollar, which is currently supported only by the country’s taxing authority and not by any hard asset.
Legislative Support and Plans
Senator Cynthia Lummis is leading a bill to create a strategic Bitcoin reserve with secure storage and a transparent purchase program. Announced at Bitcoin 2024, the initiative aims to accumulate 1 million Bitcoins over five years, starting with the 200,000 currently held. The plan includes converting gold certificates to their market value to buy Bitcoin and diversifying the asset allocation with gold and Bitcoin.
Cody Carbone, the Digital Chamber’s chief policy officer, views this bill as a hedge against inflation and economic volatility.
Economic Impact & Challenges
Holding a million Bitcoins for 20 years could halve the national debt. Bitcoin’s scarcity and finite supply give it value like gold. Despite volatility, it has averaged 55% annual growth over 15 years. Meanwhile, its adoption and network security ensure its value.
Moreover, the proposal might spark controversy, as adding Bitcoin could potentially weaken the value of gold, a crucial part of the U.S. economy. Critics are concerned about Bitcoin’s volatility, which may impact the Fed’s decision to use it as an economic hedge.
Upcoming Developments
Arnold also discussed the likelihood of the Federal Reserve cutting policy rates, possibly starting in September. Former Fed Vice Chairman Roger Ferguson suggested that economic conditions might necessitate such cuts, which could catalyze the crypto market and drive significant gains.
The Future of Bitcoin in the US
In the meanwhile, Senator Lummis’s bill is currently in its comment period, with expected approval in 2025. This would kick off a five-year plan for the US government to stack Bitcoin. Also, a possibility is looming for the US to buy 5% of the Bitcoin. The bill will be open for public feedback to ensure that most people understand and accept this strategic move.
Will Bitcoin become America’s new gold? Stay tuned.