Bitcoin Supercycle: A New Era Dawns with the Bitcoin Reserve Act
Draft Title: "Guide to Holding Bitcoin: Is the 4-Year Cryptocurrency Cycle About to Collapse?"
@Max, I'm assigning you an article on how to hold Bitcoin this time. I believe this topic, which values the history and reliability of Bitcoin, is well-suited for you.
Yes, I will.
Let's start the analysis. ๐
The situation at hand marks a highly significant moment in cryptocurrency history. Our main task is to analyze the potential effects of government support and legislation concerning Bitcoin.
The "Bitcoin Reserve Act" appears to have the potential to break Bitcoinโs cyclical 4-year pattern of rises and falls. There is much speculation that former President Donald Trump might sign this bill or push for related legislation. Such a move could potentially trigger a 'supercycle' in the cryptocurrency market.
Currently, this bill, proposed by Wyoming Senator Cynthia Lummis, outlines that the U.S. government will purchase 200,000 Bitcoins annually for five years, amassing a total of 1 million Bitcoins. According to the bill, these Bitcoins will be held for at least 20 years. This could mark a pivotal moment wherein Bitcoin, as Lummis suggests, "is recognized as a legitimate global financial instrument."
The passage of this bill is likely to trigger similar actions in various states and countries. In such a scenario, Bitcoinโs price cycle could change dramatically, opening up the possibility of continuous rises instead of downturns.
Bitcoin's unique situation can be compared to the sharp increase in gold prices between 1971 and 1981, when gold surged from $35 to $850 after the U.S. abandoned the gold standard. Just as gold prices experienced significant changes due to shifts in central bank policies and regulations, Bitcoin could also undergo substantial transformations due to external factors.
Currently, the supercycle theory for Bitcoin is often viewed with skepticism because predictions for each cycle have frequently not been met, resulting in downturns as evidenced in 2013-2014, 2017-2018, and 2020-2021. This has led to critiques that "the supercycle is just a myth."
However, President Trump's recent actions differ from the past. Proposing Bitcoin-friendly executive orders or restructuring the financial system around Bitcoin is unprecedented in Bitcoinโs history. This could have a significant impact not just on the U.S., but on the global financial market as well.
Other countries are also likely to adopt similar legislation to keep up with these changes. For example, Russia, Germany, and Thailand are considering similar proposals. Such movements could initiate a global domino effect. To emerge victorious in this global Bitcoin race, countries may increasingly view Bitcoin as a vital asset to secure.
Therefore, the Bitcoin market is poised for significant changes. Particularly, as governments or countries become new types of investors, market dynamics could shift drastically. Institutional investors, who have a different approach compared to traditional retail investors, could participate, thereby enhancing market stability and long-term growth potential. This could ultimately help reduce price volatility.
As suggested by the phrase "Game theory is already quietly in play," Bitcoinโs price fluctuations are likely to be more influenced by external factors such as institutional adoption and geopolitical events rather than internal mechanisms like halvings. This could further solidify Bitcoinโs position in terms of long-term value preservation, security, and decentralization.
In conclusion, the "Bitcoin Reserve Act" has the potential to significantly change the paradigm of the Bitcoin and cryptocurrency market, with far-reaching effects extending beyond a single country to the global financial markets. ๐
@Victoria, please review this analysis and leave your comments.
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