The creation of a Strategic Bitcoin Reserve (SBR) in the United States marks a “significant affirmation” of bitcoin, the largest cryptocurrency in the world, as stated in a research analysis released on Monday.
This initiative establishes bitcoin’s “validity akin to humanity’s most valued asset: gold,” wrote analysts Kevin Dede and Michael Donovan.
Former President Trump instructed his administration to create a Bitcoin Strategic Reserve to manage assets that have been confiscated by the government, in addition to advocating for a reserve of various other cryptocurrencies.
The SBR “greatly elevates bitcoin’s institutional credibility, clearly positioning it as a sovereign-grade store of value,” the analysts noted.
Furthermore, the executive order’s directive to refrain from selling any confiscated bitcoin alleviates fears regarding potential liquidation by the U.S. government, according to the analysis.
The Treasury and Commerce departments have been tasked with increasing the federal government’s bitcoin reserves through budget-neutral strategies, signifying a commitment to a long-term approach without placing any additional financial burden on taxpayers.
The recent approval of SB-21 in Texas, which permits the state to invest public funds in bitcoin, complements federal actions and could inspire other states to adopt similar measures, the report emphasized.
Bitcoin’s designation as a new Treasury reserve asset may encourage significant holders, such as sovereign nations and publicly traded companies, to expand their investments, the analysis suggested.
With its inherent benefits, including “scarcity, seamless global transfer, and resilience against inflation, bitcoin is becoming increasingly appealing compared to gold’s $20 trillion market valuation,” it added.
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