Bitcoin Reserve Plans May Become A Reality As The Crypto Crosses $100,000

The popularity of Bitcoin is growing consistently riding on a wave of optimism. On Monday, Bitcoin briefly surged to its 5th December record at $106,554. This was a record increase of over 5.56%. The wave of optimism is primarily originating after Donald Trump’s victory in the recently held Presidential Elections. Throughout his campaign, Donald Trump has endorsed cryptocurrencies and has even held meetings with the heads of crypto companies. He also vowed to create a strategic reserve for Bitcoin. A Bitcoin reserve plan can have a profound impact not just on the global financial system, but also on the entire crypto economy. It can have a worldwide ripple effect even on a major licensed cryptocurrency trading platform in India. 

What is a Bitcoin Reserve Plan?

The Bitcoin reserve plan has some equivalence with the concept of strategic petroleum reserve (SPR). In 1973-74 during the Arab oil embargo, the SPR was created to meet the reserve obligations of the energy program. The proposal to build a Bitcoin reserve has similar aims where the US government creates a surplus of Bitcoin. The entire concept is based on the assumption that Bitcoin can be a good hedge against inflation and market volatility. 

Arguments in Support of a Bitcoin Reserve Plan

The proponents of the idea believe that if Donald Trump after assuming office indeed makes Bitcoin a strategic reserve, then it will become a crucial commodity of the economy. Holding it would have the same impact that oil will have. The traditional strategic reserves include special drawing rights (SDR), gold, and foreign currency consisting of US dollars. If the US government holds a substantial amount of Bitcoin then it can have more interests than these traditional strategic reserves. 

Bitcoin will serve as a better reserve than gold because it requires no physical storage space or any expensive infrastructure. There are facilities offered by companies like Valco Trading such as secure wallets, decentralized networks, and multifactor authentication, none of which require large storage spaces. Furthermore, the proponents also argue that Bitcoin is not affected by socio-economic or political instances. Therefore, even during periods of global financial crisis, Bitcoin remains reliable as a store of value. 

Potential Outcomes of Bitcoin Reserve Plans

The recent surge in the prices of Bitcoin is an indication that people want to reap the growing impact of the crypto sector. This augurs well for a cryptocurrency trading platform in India since the country is highly populous and has a growing number of crypto enthusiasts. The potential outcome can have a wide-ranging impact and make it earn the title of digital gold. The blockchain of Bitcoin is seamless and does not acknowledge territorial borders. Therefore, the potential to become a strategic reserve is great. It is also undeniable that many national leaders and corporations like Microsoft, Amazon, Microstrategy, BlackRock, and Tesla are also persuading many policymakers to make it more mainstream. The company is also improving its infrastructure considerably and is evolving as a transformative asset. Therefore, the outcomes seem to be bright for the global financial system.

Final Thoughts

India is one of the world’s top populous countries and also has a growing number of crypto enthusiasts. Therefore, the plan to declare Bitcoin as a strategic reserve is going to be great for the top cryptocurrency exchanges in India. The decision may prompt many financial institutes to reframe and modify their existing financial policies accordingly. It will also change the perspective of many skeptical investors around the globe, since they may become more confident and willingly invest more. If the potential outcomes turn out to be positive then humanity can finally solve the problem of widespread income disparity. Moreover, it may resolve the issues of poverty, and include the unbanked within the realm of finance.