BTC/USD: Bitcoin and the US Economy

By Ion Jauregui - ActivTrades Analyst

Bitcoin's growing prominence in the global economy is reflected in the evolution of the BTC/USD pair and the increasing attention it is receiving from both the legislative arena and the private sector in the United States. Two recent developments - the legislative breakthrough in Montana and Michael Saylor's proposal at CPAC - highlight the bet on cryptocurrency and open a debate on its strategic role in the country's economic future.

Montana: Bitcoin as a Reserve Asset
The Montana House Business and Labor Committee took an important step in passing House Bill No. 429, which provides for the use of Bitcoin and other cryptocurrencies as state reserve assets. The vote, with 12 in favor and 8 against, evidenced a sharp partisan divide: Republican representatives supported the initiative, while Democrats rejected it. The bill seeks to create a special revenue account, through which the state will be able to invest in precious metals, stablecoins and digital assets that have maintained an average market capitalization of more than $750 billion over the past year. Bitcoin is currently the only digital asset that meets this criterion, which has prompted its consideration in this strategy. With the scheduled effective date of July 1, 2023, the state treasurer would have the power to allocate up to $50 million to this special account by July 15 of the same year. Montana thus joins other states such as Utah, Arizona and Oklahoma, which have introduced similar initiatives. The incorporation of Bitcoin as part of state reserves not only reflects the growing interest in diversifying assets, but also the recognition of cryptocurrency as an investment with the potential to protect against inflation and other economic risks. In addition, this move opens the door for other state governments to evaluate the advisability of integrating digital assets into their financial portfolios, generating a potential ripple effect on the country's economic policy.

Michael Saylor's Proposal at CPAC
During the Conservative Political Action Conference (CPAC) in Washington D.C., Michael Saylor, chairman of Strategy and one of Bitcoin's most recognized advocates, offered a statement that has resonated in the industry, “There is only room for one nation to buy 20% of the Bitcoin supply, and I believe it will be the United States.” With this statement, Saylor raises the possibility of the U.S. government acquiring a sizable portion of the cryptocurrency's total supply, with the dual purpose of positioning the country at the forefront of the digital economy and using that investment to address the national debt. While the idea is largely speculative and not yet part of an official proposal, Saylor's approach reinforces the view that Bitcoin can become a strategic economic policy tool. For Saylor, the fact that a nation manages to acquire 20% of the total amount of Bitcoin could mean not only a technological and financial breakthrough, but also a resource to diversify and strengthen the economy in an environment of growing global uncertainty. The proposal has generated both enthusiasm and skepticism. The proposal has generated both enthusiasm and skepticism. On the one hand, supporters see it as an opportunity to take advantage of the uptrend and relative stability that Bitcoin could offer compared to other traditional assets. On the other, critics point out that such a move carries significant risks, given the inherent volatility of cryptocurrencies and the complexity of intervening in such a dynamic global market.

Implications for BTC/USD and Market Projection
The BTC/USD pair has shown notable swings recently, with fluctuations of around 1.42% and 1.57%, highlighting the market's sensitivity to political news and influential statements. If state initiatives and proposals such as Saylor's materialize into concrete actions, Bitcoin could experience a boost in its adoption and, consequently, in its valuation. The integration of digital assets into economic strategies, along with the possibility of the United States acquiring a sizable percentage of Bitcoin's supply, would foster an environment of greater confidence and investment in the sector. However, the cryptocurrency market remains highly volatile, so any medium or long-term projections must consider multiple variables such as regulation, behavior of other assets and global macroeconomic conditions.

On the other hand, the use of Bitcoin as a government reserve asset could encourage other governments and large institutions to consider the cryptocurrency as a viable option to diversify their investment portfolios. This trend, if it materializes, could translate into a greater flow of capital into the cryptocurrency market, boosting liquidity and possibly reducing some of the risks associated with its volatility. Looking at the chart it is clear that this week has been particularly bullish for BTCUSD having a 5.83% rise in 7 days going from $93,303.11 to $98,264.55 where it is currently trading. After weeks of high impact for Bitcoin generated by statements from the US presidency, and scandal cases such as Miley and LIBRA, some investors showed skepticism, which generated additions in corrections of -16.45% from June 14, 2024 to the lows of February 3.

Although BTC/USD attempted to regain the $99,944 to $104,000 range, it has yet to consolidate. Currently, the stock's checkpoint (POC) stands at $97,570 and the RSI indicator marks a slight overbought 60.74%.
This sentiment is likely to continue over the weekend, especially on Friday during Asian hours, when there are significant moves by cryptocurrency companies based in Asia.

Conclusion
In summary, Bitcoin's growing prominence in economic policy and its impact on the BTC/USD pair are evidence of a transitional moment in which digital innovation is confronting traditional structures. While state initiatives and proposals such as Saylor's open the door to a future in which cryptocurrencies could play a central role in the national economy, the path will be marked by challenges inherent in a market so dynamic and susceptible to sudden changes. The consolidation of these strategies will depend on both legislative developments and the response of the global market, in a scenario that will undoubtedly continue to capture the attention of all economic players.



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