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Senator Cynthia Lummis recently confirmed that the U.S. government could start funding its Strategic Bitcoin Reserve (SBR) at any time. This development comes as %Bitcoin (CRYPTO: $BTC ) continues to increase, recently reaching a new all-time high of $126,000. Lummis said she was grateful to President Trump, and credited his administration for giving the initiative a push.

https://twitter.com/CynthiaMLummis/status/1975274100970209334

The creation of an SBR was discussed by some prominent people, including Bitwise investor Jeff Park. He proposed that if the U.S. reallocates funds from the U.S. gold reserves to Bitcoin, the nation could strengthen its balance sheet. This notion places Bitcoin as a store of value in the long term, particularly when the country is facing mounting fiscal concerns.

Park noted, "And so if there's a way to unlock the ability to build leverage on the paper gains of gold to take a call option on Bitcoin. There's something incredible here that could happen… If you own Bitcoin, and you assume that it's going to go up by 12% a year, you'll make a 30x in 30 years,"

Market analysts are closely monitoring the U.S. government's next move, particularly when it will begin directly buying Bitcoin. While the Treasury currently holds between $15 billion to $20 billion in Bitcoin through seizures, these holdings are largely passive. A confirmation that the U.S. will actively begin purchasing Bitcoin, could significantly impact the cryptocurrency's price.

Anthony Pompliano, one of the leading crypto investors, has noted the increasing anticipation in the market regarding the government's role in Bitcoin accumulation. In an interview with CNBC, he described how the real change will begin happening when the U.S. government makes its first purchases of Bitcoin. This development could be a major catalyst in the value of Bitcoin and drive institutional as well as public interest in the asset.

Why Is the Bitcoin Reserve Significant?

With the national debt of the U.S. now in excess of $37.8 trillion and concerns over inflation, Bitcoin is increasingly being referred to as 'digital gold'. Proponents believe that if the U.S. government were to add Bitcoin to its reserves, this would have a global legitimizing effect, and other countries might follow suit. This action could establish Bitcoin as a legitimate store of value and have far-reaching implications for the global financial landscape.

Despite the good news, there is still a range of political and legislative challenges. The BITCOIN Act, formally establishing the SBR, still needs approval from Congress. Lummis acknowledged that the process may be slow considering today's divided political climate. Opponents of the reserve claim that excessive political involvement can lead to volatility in the price of Bitcoin, and that this could destroy the decentralized nature of Bitcoin.

If the U.S. begins actively acquiring Bitcoin, it could provide a significant boost to the cryptocurrency market. Analysts predict that such a move could drive Bitcoin's price above $200,000, driven by increased demand and a growing sense of security around its role in global finance.