Records breaking for Bitcoin: Reasons detailed
In a recent development, US Treasury Secretary, Scott Bessent, has clarified the Treasury's stance on potential Bitcoin purchases. Initially, Bessent ruled out the possibility of the US government buying Bitcoin, causing a significant market dip. However, he later clarified that the Treasury is actively exploring budget-neutral methods to expand the Strategic Bitcoin Reserve [1][2].
This reversal has helped alleviate some of the market volatility, but Bitcoin's price remains below recent highs, trading around $118,500. The Treasury's Bitcoin holdings are primarily derived from seizures and forfeitures, valued between $15-23 billion.
Despite the official reassurances, the market reaction has remained subdued. The ongoing uncertainty surrounding the Treasury's definitive action and the potential need for congressional approval has tempered market sentiment [1][2].
Meanwhile, the US producer prices in July have slightly dampened hopes for an interest rate cut by the Fed in September. This news has also contributed to the current downturn in the crypto markets.
The statements of Bessent are being controversially discussed in the crypto community. Some argue that large Bitcoin purchases with tax money were never up for debate, while others express disappointment at the rejection of an active expansion of the Bitcoin reserve.
It's worth noting that the author of this article holds positions over Bitcoin that could benefit from its potential price development. Similarly, the board and majority shareholder of the publisher Boerse-Medien AG, Mr. Bernd Förtsch, also holds positions over Bitcoin.
Despite the current market downturn, long-term oriented investors can view this as an opportunity to (re-)buy. The fundamentally positive outlook for Bitcoin and many altcoins remains unchanged. After reaching a record high, Bitcoin has experienced profit-taking, which is a common occurrence in the crypto markets.
Lastly, Bessent has stated that the Bitcoin stockpile will not be sold. The Bitcoin stockpile in the wallets of the US government, estimated to be worth $15 to $20 billion, will continue to serve as a strategic reserve. There are no plans to expand the Bitcoin reserve created by the previous administration through additional purchases.
[1] Source 1 [2] Source 2
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- Given the recent discussions about the US Treasury's stance on Bitcoin, there is growing interest among investors in the technology sector to explore potential opportunities in finance and Bitcoin, seeking strategic ways to expand their investments.
- In light of the ongoing debates about the Treasury's approach to Bitcoin, some technology-focused investment firms are deliberating over the implications for their portfolios, considering whether to invest more in financial instruments tied to Bitcoin or altcoins.
