Key Points
- Bitcoin’s price fell below $95,000 as the likelihood of a U.S. Strategic Bitcoin Reserve (SBR) decreased.
- The U.S. government is considering creating an SBR, potentially using Bitcoin seized by the government.
Bitcoin’s value dipped under the $95,000 mark on Tuesday, marking a continuation of the downward trend that started about a month ago when it reached an all-time high of $109,200.
The dip in Bitcoin’s (BTC) value came as the probability of the U.S. establishing a Strategic Bitcoin Reserve (SBR) decreased, as indicated by a poll on Polymarket.
Decreased Odds of a Strategic Bitcoin Reserve
A Polymarket poll, with over $6.9 million in assets, estimated the likelihood of Donald Trump creating an SBR within his first hundred days at 12%. The odds have been on a steady decline since hitting a high of 40% in January.
Another poll indicated a decrease in the odds of the Texas Strategic Bitcoin Reserve Act being enacted this year, from over 60% to 38%. A Kalshi poll set these odds at 41%.
These low probabilities persist as state senate hearings take place to discuss the establishment of the reserve, with experts and the state comptroller being interviewed. Legislators in other states, including Wisconsin, Arizona, Florida, Alabama, and Wyoming, are introducing bills to establish similar reserves.
Potential U.S. Strategic Bitcoin Reserve
The Trump administration is in consultations about the possibility of setting up a Strategic Bitcoin Reserve. Venture capitalist David Sacks, who serves as the administration’s crypto and artificial intelligence czar, confirmed these ongoing discussions.
One potential approach is to establish the strategic fund using Bitcoin that has been seized by the government. According to data from BitcoinTreasuries, the U.S. government currently holds 198,109 BTC, valued at $18 billion. The government could also acquire Bitcoin through the recently formed sovereign wealth fund.
The establishment of a U.S. government SBR could be significant, potentially encouraging other countries to do the same. For instance, China holds 190,000 BTC worth $18 billion, while the UK holds 61,245 BTC worth $5.8 billion. Additional purchases could happen at a time when Bitcoin mining difficulty and demand are increasing, and exchange balances are decreasing.
Bitcoin’s Price Pattern
The daily chart shows that BTC has been in a narrow range for the past few months, staying above the 100-day moving average.
Interestingly, Bitcoin has formed a megaphone chart pattern, a commonly used bullish indicator. This pattern consists of two diverging trendlines and typically indicates a strong breakout after retesting the lower side of the channel.
This pattern is consistent with the cup-and-handle and bullish flag formations on the weekly chart, suggesting that Bitcoin could experience a rebound in the coming weeks.
