US Government Will Not Buy Bitcoin in 2025, Says Galaxy Digital

Highlights:

• US to safeguard, not buy, Bitcoin in 2025, Head of Research at Galaxy Research.
• Galaxy Digital analyst suggests nations and Nasdaq 100 companies may add Bitcoin to their reserves.
• Senator Cynthia Lummis proposes the Bitcoin Act 2024, aiming for the US to acquire one million BTC.

In a report on December 27, Alex Thorn, Head of Research at Galaxy Digital Research, predicted that the US government will not buy any Bitcoin (BTC) next year but will focus on safeguarding its BTC holdings. He suggested that departments and agencies would likely take steps to explore a broader Bitcoin reserve policy. The US government currently holds about 183,850 BTC, valued at $17.36 billion, according to Spot on Chain. This Bitcoin is spread across different wallet addresses.

Galaxy Digital analyst “JW” predicts that five Nasdaq 100 companies and five countries may include Bitcoin in their wealth funds or balance sheets. The crypto expert emphasized that a firmer US position on Bitcoin adoption could spark a race among nations to mine or acquire Bitcoin.

JW stated:

“Competition among nation states, particularly unaligned nations, those with large sovereign wealth funds, or even those adversarial to the United States, will drive the adoption of strategies to mine or otherwise acquire Bitcoin.”

Senator Cynthia Lummis of Wyoming proposed the Bitcoin Act 2024. If approved, it would allow the US government to add BTC as a reserve asset. The plan includes purchasing 200,000 BTC every five years. This would accumulate a total of one million Bitcoin. The government would hold these Bitcoins for at least 20 years. 

However, during a press conference on December 19, Federal Reserve Chair Jerome Powell ruled out the possibility of the central bank adding Bitcoin to its balance sheet. He cited legal restrictions under the Federal Reserve Act. “We’re not allowed to own Bitcoin. The Federal Reserve Act says what we can own, and we’re not looking for a law change,” Powell said. Political leaders around the world, including President-elect Donald Trump and Republican lawmakers, are advocating for the creation of a strategic Bitcoin reserve.

21 – The U.S. government will not purchase Bitcoin in 2025, but it will create a stockpile using coins it already holds, and there will be some movement within the departments and agencies to examine an expanded Bitcoin reserve policy. –@intangiblecoins

— Galaxy Research (@glxyresearch) December 27, 2024

Global Push for Strategic Bitcoin Reserves

Several US states, including Texas, Florida, and Pennsylvania, have also expressed interest in establishing their own strategic Bitcoin reserves. Other sovereign governments have considered creating their own Bitcoin reserves. Brazil is a leading example, becoming a thriving hub for crypto innovation.

MEP Sara Knafo urged the EU to adopt Bitcoin reserves in Europe. She opposed the concept of a digital euro, highlighting Bitcoin’s decentralization as protection against authoritarian control. At the same time, Japan has taken a more cautious approach. As Trump pushes for Bitcoin dominance, other countries may face challenges in catching up later.

Bitcoin Reserve Could Offset 35% of US Debt by 2049

Asset management firm VanEck has predicted that if the US creates a reserve of 1 million Bitcoins, as proposed by Senator Cynthia Lummis, it could reduce the national debt by 35% over the next 24 years. The firm estimates this move could offset about $42 trillion of the country’s liabilities. This forecast assumes Bitcoin’s price will rise to $200,000 by 2025, a significant increase from its current value of $94,445.

VanEck's latest report predicts that by adopting a strategic Bitcoin reserve, the United States could slash its national debt by as much as 36% by 2050. If Bitcoin's annual appreciation rate reaches 25%, its price could soar to $42 million by 2049. VanEck recommends stopping the…

— Wu Blockchain (@WuBlockchain) December 23, 2024