A shift toward institutional stability?
Trump’s plan involves using confiscated Bitcoin for the reserve. Some experts believe this will reduce selling pressure and make Bitcoin a more trusted asset. Others argue that because the government is not buying new Bitcoin, the effect on prices may be limited.
“Throughout history, governments have used alternative stores of value—such as gold—to protect against inflation. Today, many nations hold digital assets confiscated from criminal activities, and these assets could be repurposed as legal tender,” said Edul Patel, CEO of Mudrex.
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He noted that the U.S. government currently holds around 200,000 Bitcoin worth approximately $17 billion. “By treating these digital assets as a reserve, the US effectively removes over $17 billion in potential selling pressure from the market. If the government accumulates a large portion of the global crypto supply, it could help stabilize the market and reduce the notorious volatility of digital currencies.”
Trump’s Crypto Summit: Defining future regulations
Many industry players see Trump’s upcoming Crypto Summit on March 7, 2025, as a key event for the market.
“The event is expected to focus on establishing a federal regulatory framework that fosters innovation while ensuring investor protection. We may see announcements on token classification, tax incentives, and reduced enforcement actions—each of which could shift institutional sentiment,” said Ryan Lee, Chief Analyst at Bitget Research.Lee added that the summit could provide more clarity on the role of the U.S. Crypto Strategic Reserve, including potential future acquisitions and guidelines for securities laws. “A successful summit could see Bitcoin reclaim $100K, while a lack of actionable steps might disappoint investors, leading to volatility.”
How will market sentiment shift?
Despite Bitcoin’s initial dip after the announcement, some experts see long-term gains as the industry adapts to this new regulatory landscape.
“The reserve will be capitalized using Bitcoin forfeited through legal proceedings, avoiding additional taxpayer costs. This initiative is expected to boost investor confidence, potentially stabilize market volatility, and drive future growth by promoting increased adoption and regulatory clarity,” said Shivam Thakral, CEO of BuyUcoin.
The move is seen as a step toward integrating Bitcoin into traditional finance while maintaining government oversight.
Global implications: India needs a wake-up call?
The U.S. government’s shift toward embracing Bitcoin has also sparked discussions about global regulatory approaches.
Ashish Singhal, Co-founder of CoinSwitch, highlighted the potential impact on India’s crypto ecosystem: “The U.S. is setting the stage for innovation and attracting top talent by providing policy clarity. Meanwhile, India’s current approach of taxing crypto at the highest brackets continues to drive entrepreneurs and investors overseas. If we want to lead in Web3, we need to embrace progressive regulations, foster innovation, and create an environment where the next generation of crypto pioneers can thrive. The time to act is now.”
What’s next?
While Trump’s Bitcoin Reserve Plan is unlikely to lead to immediate government purchases, it sets the foundation for a more structured approach to digital assets. Industry leaders expect clearer regulations, increased institutional interest, and a gradual shift toward Bitcoin being viewed as a strategic asset rather than a speculative one.
With the upcoming Crypto Summit, market watchers will be looking for regulatory signals that could define Bitcoin’s future trajectory. If policymakers provide a clear framework, crypto markets could see renewed confidence and growth in the months ahead.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)