Bitcoin, often referred to as digital gold, has seen a significant surge over the past year due to a mix of Wall Street’s uptake, favorable regulations, and macroeconomic influences, triggering warnings of a potentially “dangerous” bubble.
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The value of bitcoin has surpassed $100,000 per coin since Donald Trump’s election victory last November, with the CEO of Coinbase predicting a specific timeline for when bitcoin will surpass gold’s $18 trillion market cap.
As Elon Musk deems the U.S. debt clock “terrifying,” senator Cynthia Lummis, an advocate for bitcoin, has offered Musk a potential “fix” involving bitcoin to address concerns regarding U.S. gold reserves.
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Elon Musk, the billionaire behind Tesla and driving force of the Doge department of government efficiency, has been informed that bitcoin adoption could “resolve” questions about the U.S. gold reserve—and potentially lead to a spike in bitcoin’s value.
“Bitcoin fixes this,” Lummis posted on X in response to Musk’s inquiry regarding the frequency of reviews of U.S. gold in Fort Knox. “A bitcoin reserve could be audited anytime, 24/7, with a simple computer. It’s time for an upgrade in our reserves.”
Lummis, a Republican senator from Wyoming, proposed The Bitcoin Act to Congress last year, advocating for the establishment of a strategic bitcoin reserve aimed at addressing the U.S.’s escalating near-$36 trillion national debt by acquiring 1 million bitcoins over a five-year period.
Musk, active in reforming U.S. governmental processes, replied to a post on X that urged him to “check inside Fort Knox just to verify the existence of 4,580 tons of U.S. gold.”
“Surely it’s reviewed at least annually,” Musk stated.
Gold prices have surged in recent weeks, driven by escalating fears of a global trade conflict that may adversely impact the world economy.
Gold has reached a new high of $2,942.70 per troy ounce, increasing nearly 10% since Trump’s inauguration on January 20, while both bitcoin and stock indices like the S&P 500 have stagnated.
This rally in gold has prompted optimistic bitcoin speculators to bet that it will shortly exceed its all-time high of almost $110,000 per bitcoin, as reported by Deribit options data from Coindesk.
“The recent decline in volatility, along with the rising gold price, should underscore bitcoin’s growing status as an alternative store of value,” analysts from the Bitfinex exchange remarked in emailed statements. “We believe that while bitcoin may experience short-term challenges due to macroeconomic pressures in the upcoming weeks, its long-term value proposition remains solid.”
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Although the bitcoin price surge following Donald Trump’s election victory has plateaued, some analysts predict it may continue to rise.
Meanwhile, analysts at broker Bernstein have forecast that Donald Trump’s proposed U.S. crypto task force will prioritize establishing a national bitcoin reserve, potentially involving the Federal Reserve in issuing debt or divesting from its gold stock to fund these bitcoin acquisitions.
“The establishment of a U.S. bitcoin reserve might spark a global race among nations to accumulate bitcoin as a reserve asset,” wrote analysts led by Gautam Chhugani.
This fund “would recognize significant U.S. crypto firms and market frontrunners as essential assets to hold. Investors should prepare for the next phase of the bull market within bitcoin and related equities.”
Last week, Abu Dhabi’s $1 trillion sovereign wealth fund disclosed its investment in bitcoin, acquiring $436 million worth of BlackRock’s spot bitcoin exchange-traded fund (ETF) in the final quarter of the previous year, according to a regulatory document.
In recent months, there have been rampant rumors suggesting that various countries and their wealth funds are discreetly amassing bitcoin, fueled by ambitious statements made by BlackRock’s CEO earlier this year.
Just last week, Trump’s crypto czar David Sacks hinted that “significant announcements are on the horizon” after confirming that the Trump administration is investigating the possibility of a national bitcoin reserve akin to the U.S. oil and gold reserves.
“This is one of the primary considerations for our internal working group within the administration,” Sacks stated during a press briefing earlier this month.
