Trump's Bitcoin Reserve Act Could Spark a Crypto Supercycle

A Bitcoin Reserve Act may end crypto’s 4-year boom-bust cycle

The potential introduction of a Bitcoin Reserve Act could disrupt the traditional four-year cryptocurrency market cycles, according to Cointelegraph. Speculation is rife that President Donald Trump might sign an executive order or pass legislation establishing a national Bitcoin reserve. This move has already seen similar proposals in states like Texas and Pennsylvania, with countries such as Russia and Germany reportedly considering their own versions.

Wyoming Senator Cynthia Lummis introduced the act earlier this year, proposing that the US government purchase 200,000 BTC annually over five years for its treasury. The idea behind this initiative is to recognize Bitcoin as a legitimate global financial instrument and potentially trigger what some call a "supercycle" in crypto markets.

Bitcoin falls below $100,000 amid hawkish Fed rate outlook

Markets Insider reports that Bitcoin's price fell below $100,000 due to concerns about future interest rates following recent Federal Reserve guidance. Despite lowering rates by 25 basis points recently, projections indicate fewer cuts than previously expected next year. As other risk assets began rebounding from Wednesday's plunge, cryptocurrencies continued their downward trend.

This decline saw Ethereum and XRP also experiencing significant drops alongside Bitcoin's slide past key psychological thresholds. Crypto investors were unsettled by these developments after months of rallying driven partly by optimism surrounding Trump's election victory.

Why Are Bitcoin (BTC) And Crypto Prices Down?

According to Investing Haven, several factors have contributed to the recent downturn in cryptocurrency prices, including increased strength of USD against major currencies, which negatively impacted digital asset valuations globally. Additionally, December marked another local top within ongoing three-month cyclical patterns observed across various charts tracking performance metrics related specifically to Bitcoin itself among others.

The publication highlights how it remains important to be long-term bullish despite the short-term vulnerabilities present currently, given historical data suggesting otherwise favorable outcomes eventually arising. This could happen sometime soon, perhaps even sooner rather than later, depending on circumstances prevailing at any particular moment.

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