Originally published on: December 14, 2024
A warning has been issued by a crypto analyst regarding the potential approval of Senator Lummis’ proposal for the US government to acquire 5% of Bitcoin’s total supply. Collective Shift’s CEO, Ben Simpson, anticipates significant price volatility if the strategic Bitcoin reserve is given the green light, suggesting that Bitcoin may experience a surge followed by a pullback.
Following President Trump’s recent election win, Senator Cynthia Lummis expressed her intention to introduce legislation for the US government to purchase 1 million Bitcoin and hold it for two decades. This news has stirred speculation within the crypto market, with analysts like Simpson predicting a shift in market dynamics.
Simpson believes that Bitcoin dominance, currently at 56.63%, is poised to decline as investors start rotating their funds into alternative cryptocurrencies. He notes that Bitcoin has been consolidating around the $100,000 mark, prompting a surge in the value of altcoins.
Although many traders expect altcoins to outperform Bitcoin in the coming weeks, Simpson urges caution, indicating that the transition may not be smooth sailing. Despite this, analysts from Bitfinex remain optimistic about Bitcoin’s long-term potential, emphasizing its value as a competitive investment compared to altcoins.
With Bitcoin surpassing six figures, the demand for the digital asset shows no signs of slowing down. VanEck, a global investment manager, has reiterated its $180,000 price target for Bitcoin, signaling that the current bull market phase is just beginning.
As the crypto market continues to evolve, investors are advised to stay informed and watch for potential buying opportunities amid market fluctuations. The approval of the US strategic reserve could have a significant impact on Bitcoin’s trajectory, creating both challenges and opportunities for crypto enthusiasts and investors alike.