This article is brought to you by FBS.
The United States has made a historic step by formally accepting Bitcoin as one of its strategic assets. The recent move by President Donald Trump to announce a Strategic Bitcoin Reserve – a US government cryptocurrency reserve – is the first instance when Bitcoin is officially a reserve asset according to the US government. The early March 2025 executive order directs that the reserve be financed using Bitcoin already confiscated in criminal and civil forfeitures (about 200,000 BTC held by the government). It explicitly bans selling these holdings, echoing the crypto mantra of “never sell your Bitcoin.” Instead, agencies must “HODL” this “digital gold” in a “digital Fort Knox” for the nation.
This action raises basic questions: Is this the start of a new age in digital finance, or a political strategic maneuver? What does it portend for the future of Bitcoin and the broader cryptocurrency market?
Price Movements and Market Reaction
Bitcoin’s price saw whipsaw volatility amid Trump’s crypto reserve reveal. When President Trump initially made public through social media on March 2 2025 that the US reserve would have five cryptocurrencies, the price of Bitcoin rose more than 10% above $94,000, and Ether rose ~13% above $2,500.
Source: @realDonaldTrump, Truth Social
The whole crypto market gained $300+ billion in hours, a ~10% increase in global market cap. Investors interpreted the news as bullish confirmation that the US government was finally on board with adopting crypto – triggering a broad rally in Bitcoin and leading altcoins.
BTCUSD, H2
However, a few days later, details of the executive order prompted a “sell the news” dip. On March 7, when the White House confirmed that the reserve would initially contain only seized Bitcoin and not immediately buy more, Bitcoin briefly fell ~5% to below $85,000. Some traders were disappointed that there was no aggressive buying plan. Still, the pullback was short-lived: by the next morning, BTC rebounded to near $89,000. Even after the knee-jerk selloff, Bitcoin remained at historically elevated levels – it had hit an all-time high of around $109,000 in January 2025 amid speculation of pro-crypto US policies.
Market analysts opine that macroeconomic considerations tempered the crypto rally toward the end of the week. After the initial euphoria, wider worries – such as impending trade wars and overall risk-off sentiment – resulted in crypto surrendering those gains. Nevertheless, the uptrend remains in place. Bitcoin's price is considerably higher than it was a year ago, supported by hopes of favorable US regulation and the 2024 supply-halving, which halved new BTC issuance by 50%. The 2024 halving reduced Bitcoin's block reward from 6.25 to 3.125 BTC, increasing its scarcity. Historically, these halvings have produced multi-year bull cycles, and most bulls interpret Trump's reserve news as another catalyst on top of post-halving momentum.
Historical Parallels
To put Trump’s Bitcoin Reserve in context, observers are comparing it with past Bitcoin catalysts like ETF approvals and mining reward halvings:
- ETF approvals: The advent of Bitcoin Exchange-Traded Funds has been on the wish list of mainstream adoption for years. In late 2024, the US saw the top-ranked Bitcoin ETFs gaining traction, and asset managers significantly ramped up exposures to these instruments. It was a repeat of the gold ETF history – the introduction of gold ETFs in the 2000s opened floodgates to institutional investment. The same is currently occurring with Bitcoin ETFs, which are gaining traction not only among hedge funds but even banks and sovereign wealth funds. Trump's pro-crypto attitude will further speed up the SEC's approval of more crypto ETFs, even Ethereum and potentially Solana funds. Indeed, sentiment in the crypto sector was high that a spate of new listings of ETFs was imminent under a friendly administration.
- Bitcoin halvings: Bitcoin's intrinsic halving events have repeatedly defined its price history. The April 2024 last halving, reducing mining rewards from 6.25 BTC to 3.125 BTC, further compressed Bitcoin's supply. Post-halving dynamics typically show positive price action as scarcity accelerates, and 2025 is no exception. Bitcoin gained from around $30K pre-halving to over $75K by Nov 2024 in the hope of elections, and eventually over $100K by January 2025 due to a pro-crypto policy framework. In the past, the year or so after a halving has seen disproportionate gains (2013, 2017, 2021 cycles), and most analysts hold the view that the 2024–2025 cycle would be turbo-charged by institutions and now government demand. Standard Chartered's team notoriously priced $125K by the end of 2024 if Trump was re-elected and up to $200K by the end of 2025, regardless of who won. Now Reuters even reported one Standard Chartered analyst's $500K per Bitcoin price target before Trump leaves office– an enormous situation based on monumental adoption achievements. Even if such projections are purely conjecture, the sheer size of bullish optimism churning within pro-Bitcoin circles when a US president is their supporter must not be overlooked.
- Previous government crypto moves: Comparisons are also drawn to smaller-scale precedents like El Salvador’s Bitcoin experiment. In 2021, El Salvador made Bitcoin legal tender and began accumulating a national Bitcoin stash. By March 2025, El Salvador held 6,100+ BTC in its reserve. Though their scale is tiny next to the US, it set a template for sovereign Bitcoin treasuries. El Salvador even coined the term “Strategic Bitcoin Reserve” for its fund. Trump’s US reserve initiative is far larger and more formalized – a potential game-changer that dwarfs earlier cases. Crypto advocates liken it to the creation of the US Strategic Petroleum Reserve in the 1970s – a proactive stockpiling of a critical commodity for national security. Just as that petroleum reserve reshaped oil markets, a US Bitcoin reserve could be equally paradigm-shifting for digital asset markets.
Geopolitical Responses and a Domino Effect
The US move is sending shockwaves globally, prompting allies and competitors alike to assess their crypto strategies. Crypto analysts predict a “domino effect” as other nations and states follow America’s lead. “Japan is already watching US developments closely,” noted one industry report, hinting that the pro-crypto shift in Washington may inspire Japan – one of the first countries to regulate crypto exchanges – to consider accumulating Bitcoin or easing its own rules. In Europe, where MiCA regulations have introduced a crypto framework, policymakers will be weighing whether the EU should also treat Bitcoin as a reserve asset or risk falling behind US innovation. Sovereign wealth funds in the Middle East and Asia, some of which quietly began buying crypto ETFs, might ramp up those allocations seeing the US openly endorse crypto ownership at a national level.
Smaller nations that have already dipped into Bitcoin are encouraged by the US stance. The President of El Salvador welcomed Trump's announcement as vindication of his own Bitcoin-reserve idea. (El Salvador itself bought more BTC recently, although it promised the IMF this was within parameters agreed upon.) Other crypto-advanced countries like the UAE and Singapore can double down on attracting crypto money, hoping to be the center of a US-endorsed asset class. Even within the US itself, certain states (e.g. Texas, and Wyoming) have proposed bills to retain Bitcoin in treasuries. A national reserve would lend momentum to such efforts, basically initiating a federal-state-level race to hoard digital gold. Geopolitical rivals might view America's crypto reserve as a strategic step to reinforce dollar hegemony via technological innovation.
On the flip side, geopolitical rivals might view America’s crypto reserve as a strategic play to strengthen dollar dominance via tech innovation. Notably, Russia and China – which have been looking for dollar system alternatives – may see the US reserve as a move to control the crypto space. China has prohibited cryptocurrency trading domestically, focusing on its digital yuan, so it may keep going down that path. Russia, under economic sanctions, was already keen on using crypto for cross-border payments. If Washington starts to accumulate Bitcoin, Moscow may step up its own game to use or possess crypto as a sanctions-evasion tool or store of value. President Trump has even made threats of sanctions and tariffs on competitors in combination with his crypto plans, maybe pushing those nations into crypto desperation. Overall, the US crypto reserve has been seen as cementing America's standing in the world crypto economy – a signal that crypto is here to stay in the international arena, and putting all governments to task to craft a reaction, whether joining up or cautionary distance.
Short-Term Predictions
In the short term, analysts predict a period of consolidation and high volatility for Bitcoin as the market digests the news. The initial disappointment that the US reserve involves no immediate buying has led many traders to temper their near-term price targets. Bitcoin may trade rangebound in the coming weeks, according to market analysts at Bitfinex, who note that without new government demand, the price lacks a fresh catalyst and could oscillate around current levels barring other news. Indeed, Bitcoin has struggled to decisively hold above the $90,000 mark after the announcement, suggesting strong resistance until more clarity or bullish impetus emerges. Some experts, like analyst Timothy Peterson, expect Bitcoin to stabilize in the $85K–$95K range for the next 1–3 months, finding a new equilibrium after the recent run-up. This implies that while a breach of the psychological $100K level might not be imminent, it is still on the horizon – Peterson notes BTC could “shoot above $100,000 soon” once the consolidative phase passes.
Other bullish voices are betting on a quicker return to highs: Swan Bitcoin CEO Cory Klippsten gave Bitcoin a “50% chance of surpassing $109,000 by June”, citing resilient long-term holders and sustained institutional interest. Short-term sentiment overall remains cautiously optimistic; despite recent dips, institutional inflows continue (Q4 2024 saw asset managers boost allocations to Bitcoin-linked ETFs), and enthusiasts are unwavering that the uptrend is intact.
BTCUSD, Weekly
FBS Analysts’ Take
We also remain optimistic. Despite the beginning of correction after reaching 161.8 Fibonacci, we expect a possible retest of the trend line at the support zone of 70,000.
- We consider a rebound from the trend line, growth up to 104,000, and further growth up to 157,000, which corresponds to 261.8 Fibonacci!
That said, volatility will likely stay elevated. News about connected US policy (e.g., any hint of the government actually buying Bitcoin or new legislation) could whipsaw prices. We already witnessed macro drivers such as Trump's aggressive China tariffs temporarily overlapping with a 14% drop in Bitcoin price in February, illustrating Bitcoin's sensitivity to macroeconomic movements. Any geopolitical event – let's say another nation announcing its own reserve – could similarly shock the market. In the near term, traders are monitoring technical levels and Federal Reserve cues. As Reuters added, the cryptocurrency market "needs a reason to go higher," such as Federal Reserve interest rate cuts or concrete pro-crypto regulations to support the rally.
Long-Term Outlook
Looking further ahead, the consensus among many in the crypto community is that Trump’s Bitcoin Reserve could be a bullish game-changer for long-term adoption and price growth. In effectively giving the green light to other large stakeholders (whether countries, firms, or institutional investors) to do the same by officially sanctioning Bitcoin as a reserve asset, the US government has effectively opened the door. Others have issued mind-boggling targets: Standard Chartered bank analysts, for example, are reported to predict that Bitcoin could reach $200,000 by 2025 and even $500,000 by 2028 if the right conditions (such as Trump's supportive crypto policies) prevail. Their reasoning is that higher adoption and deficiency will exponentially fuel value – an argument lent credence by the upcoming Bitcoin halving (scheduled for 2028) which further reduces new supply. Even more conservative experts concede a bias upward: Bitwise CEO Matt Hougan called the US reserve a "trendsetter" and noted it's the first time a current US president has acknowledged Bitcoin as a strategic asset – a signal that may catalyze global adoption and set Bitcoin on a long-term uptrend.
As legitimacy grows, so does infrastructure: expect progress on Bitcoin ETF approvals, more user-friendly crypto banking services, and educational efforts by major investment firms to meet client demand. On the international front, if other countries initiate their own crypto reserves or holdings (even quietly), Bitcoin could mature into a global reserve-like commodity over the next decade, trading increasingly like a macro asset (akin to gold) influenced by geopolitical developments. Wider crypto adoption beyond Bitcoin is also a long-term prospect. Trump’s inclusion of coins like Ether, Solana, and Cardano in the conversation might encourage development in those ecosystems and hint at a future where multiple cryptocurrencies have specialized roles in government or finance. However, Bitcoin is set to remain the primary beneficiary as the flagship “digital gold.” One important long-term consideration is that government and institutional adoption may bring more stability to Bitcoin’s price. As more Bitcoin gets locked into long-term holdings (whether in a US reserve, corporate treasuries, or sovereign wealth funds), the circulating supply available for trading shrinks, potentially dampening extreme volatility over time.
Conclusion
All in all, Trump's proposal for a Bitcoin Reserve has ushered in a wave of optimism within the crypto space, coupled with an admission of the obstacle it creates. From a pro-crypto perspective, this is a milestone that ratifies the stance of Bitcoin as "digital gold" and the broader cryptosystem as a class of strategically important assets. The immediate consequences have been through-the-roof prices, bullish institutional forecasts, and a sense that crypto is breaking out of the periphery and into the halls of influence. ETF and halving parallels to the past suggest this could be one of the cycle-defining drivers of this cycle, which would propel Bitcoin and its peers to all-time highs if the momentum continues For now, though, the trajectory is set.
For now, though, the trajectory is set. The United States’ Bitcoin Reserve announcement stands as a historic affirmation of crypto’s legitimacy. It has rallied the pro-crypto community – from retail holders to billion-dollar institutions – around the idea that Bitcoin and select altcoins are not just speculative instruments, but integral to the future of finance and national strategy. If the optimism pans out, this could usher in a new era where Bitcoin sits alongside gold and dollars in country vaults. And even if obstacles emerge, the past months have made one thing clear: global economic leaders can no longer ignore cryptocurrency’s rise, and those embracing it early aim to reap the rewards.
This article is only for informational purposes and should not be taken as financial or investment advice.
