Original author: Bravos Research
Original translation: TechFlow
Trump officially announced the establishment of a strategic Bitcoin reserve. Will this be a turning point for Bitcoin?
The United States currently holds $748 billion in gold reserves, while Bitcoins market value is approximately $1.6 trillion.
If governments build gold-like reserves, it could drive Bitcoin prices up 50%
I still remember that between September 2024 (before the election) and December 2024 (after Trump won the election), Bitcoin soared 94%. At that time, rumors about Bitcoin reserves had begun to ferment.
This means that the reserve narrative may have been priced in by the market in advance. At the same time, Bitcoin is now facing other risks, such as the plunge in the U.S. stock market over the past month.
However, we still think the reserve announcement could be more significant than people realize, and that this move could set the stage for a big rally in Bitcoin by 2025. After all, the U.S. is not the only country with a strategic reserve.
The total global gold reserves are approximately $2 trillion, which is more than the market value of Bitcoin. In addition, the US governments holdings of Bitcoin add credibility to this asset class, and Bitcoins prosperity is built on trust and confidence.
Since December 2022, Bitcoins bull run has been driven primarily by institutional adoption. The launch of a Bitcoin ETF in November 2023 sparked huge optimism, and Bitcoin has risen 85% since then.
In our view, this is very similar to the adoption of gold in the early 2000s: the first US gold ETF was launched in November 2004, which marked the beginning of a 400% bull market in the following years.
But the bull market in gold did not happen overnight. The rise was gradual, and it also experienced many corrections during this period.
If we compare gold’s bull run in the 2000s to Bitcoin’s current run-up, the patterns are very similar. The pullback may have been painful, but it doesn’t seem to negate the larger trend of institutional adoption.
