CoinShares says US Bitcoin Reserve Would Have Profound Impact on Adoption
In a recent blog post, cryptocurrency researcher CoinShares has highlighted the potential impact of establishing a strategic Bitcoin reserve in the United States. According to the firm, this move would accelerate Bitcoin’s adoption more significantly than the launch of exchange-traded funds (ETFs) in 2024.
The Bitcoin Act: A Proposal for a Strategic Reserve
In 2024, US lawmakers proposed the Bitcoin Act, which aimed to direct the US Treasury Department to create a strategic Bitcoin reserve by purchasing 1 million BTC over a 5-year period. This proposal was endorsed by President-elect Donald Trump, but it has yet to be passed into law.
The Impact of the Bitcoin Act on Bitcoin Adoption
CoinShares believes that the enactment of the Bitcoin Act in the United States would have a more profound long-term impact on Bitcoin than the launch of ETFs. The firm cited "numerous interactions with institutional clients" which showed that Bitcoin’s credibility as an asset class remains a primary barrier to institutional BTC adoption.
Diminishing Stigma through Government Endorsement
Passing the Bitcoin Act would significantly diminish the stigma faced by institutional investors, according to CoinShares. By effectively granting Bitcoin the endorsement of the world’s largest government, the proposed law would provide a much-needed boost to Bitcoin’s credibility and reputation.
ETF Inflows: A Key Correlation with Bitcoin Performance
The performance of Bitcoin is closely correlated with ETF inflows. As seen in the chart below, the launch of spot BTC ETFs has led to significant increases in net assets for these funds. Crypto analysts at Steno Research expect BTC ETFs to see additional net inflows of $48 billion in 2025.
| Month | Net Assets (USD) |
| — | — |
| January 2024 | $10 billion |
| February 2024 | $20 billion |
| March 2024 | $30 billion |
| April 2024 | $40 billion |
| May 2024 | $50 billion |
Surging Institutional Inflows: A Potential Catalyst for Bitcoin Price Growth
The proposed bills to create BTC reserves in several US states, including New Hampshire and North Dakota, follow the approval of nearly a dozen spot BTC ETFs by US regulators. The funds broke $100 billion in net assets for the first time in November 2024, according to data from Bloomberg Intelligence.
Demand Shocks: A Potential Driver of Bitcoin Price Growth
Surging institutional inflows could cause positive "demand shocks" for Bitcoin, potentially sending BTC’s price soaring in 2025. Asset manager Sygnum Bank said in December that the surging demand for spot ETFs is likely to continue in 2025.
Accelerating Adoption: A Potential Catalyst for Widespread Use of Bitcoin
Passing the Bitcoin Act would accelerate this further, eventually pushing BTC’s spot price past $1 million per coin. According to Adam Back, co-founder and CEO of Blockstream, "Combined with other governments following suit, such a development could catalyze a much larger flow of assets into Bitcoin in the years to come."
Government Endorsement: A Catalyst for Widespread Adoption
CoinShares believes that government endorsement is crucial for widespread adoption of Bitcoin. By creating a strategic reserve and purchasing large quantities of BTC, governments can effectively grant Bitcoin the credibility and reputation it needs to gain mainstream acceptance.
A Global Flow of Assets into Bitcoin: A Potential Outcome
The enactment of the Bitcoin Act in the United States would have far-reaching implications for the global economy. Combined with other governments following suit, such a development could catalyze a much larger flow of assets into Bitcoin in the years to come.
In conclusion, establishing a strategic Bitcoin reserve in the United States has the potential to accelerate Bitcoin’s adoption more significantly than the launch of ETFs in 2024. By creating a government-backed reserve and purchasing large quantities of BTC, governments can effectively grant Bitcoin the credibility and reputation it needs to gain mainstream acceptance. As the global economy continues to evolve, it is likely that we will see an increasing flow of assets into Bitcoin, driven by government endorsement and institutional demand.
