A government-backed cryptocurrency reserve in the U.S. has the potential to significantly impact Bitcoin’s valuation, according to a new report from Sygnum Bank. Their analysis suggests that such a reserve could drive substantial Bitcoin purchases, adding approximately $460 billion to its market capitalization—an estimated 25% increase from current levels.
Institutional Demand and Price Multipliers
Due to Bitcoin’s limited liquid supply, large capital inflows tend to create strong upward price movements. “Larger inflows cause upward price shocks,” noted Katalin Tischhauser, Sygnum’s head of research.
Institutional investments already exert a significant influence on Bitcoin’s price, with every $1 billion in ETF inflows historically resulting in a 3-6% price increase. If the U.S. government and state entities begin acquiring Bitcoin, this multiplier effect could intensify, accelerating price appreciation.
Trump’s Crypto Strategy and the Road Ahead
Former U.S. President Donald Trump has voiced support for the idea of a national crypto reserve, envisioning holdings in Bitcoin, Ethereum (ETH), Solana (SOL), XRP, and Cardano (ADA). This proposal aligns with the BITCOIN Act, introduced by Senator Cynthia Lummis in mid-2024, advocating for a Bitcoin-exclusive national reserve.
While more than half of U.S. states have explored the possibility of creating state-level crypto reserves, at least five states have rejected such initiatives, citing regulatory and financial risks. Commerce Secretary Howard Lutnick has hinted that Bitcoin may be treated as a preferred asset within the proposed national reserve, potentially giving it priority over other cryptocurrencies.
However, despite Trump’s endorsement, regulatory and legislative challenges make nationwide adoption uncertain. “The market currently sees the probability of a national Bitcoin stockpile as relatively low, but any positive developments would be bullish for Bitcoin,” Tischhauser added.
Will a U.S. Crypto Reserve Become Reality?
Congress presents the biggest hurdle, as previous crypto-related proposals have struggled to gain traction in Washington. If the initiative moves forward without congressional approval, it may function more as a government-supported investment rather than a strategic asset reserve.
While state-level initiatives may continue progressing, federal implementation would likely face delays due to political and regulatory obstacles. The upcoming White House Crypto Summit on March 7 is expected to shed light on the administration’s position and potential next steps.
Market Impact and Institutional Reactions
- If the U.S. government moves forward with a Bitcoin reserve, institutional investors may act preemptively, driving prices higher.
- If Congress stalls approval, price effects may be more gradual, influenced by long-term accumulation trends.
- If the idea is abandoned, Bitcoin’s price will continue to be shaped by ETF demand, macroeconomic trends, and retail investor interest.
Though the establishment of a U.S. crypto reserve remains speculative, the very discussion of such an initiative has reinforced Bitcoin’s standing as a potential reserve asset. Any major announcements from the March 7 Crypto Summit could serve as a catalyst for Bitcoin’s next major price movement.
