U.S. Bitcoin reserve plan could ignite global crypto arms race

Senator Cynthia Lummis recently outlined a bold proposal: Within a hundred days of Donald Trump's return to the presidency, she envisions a strategic bitcoin acquisition initiative by the U.S. government.

According to Host of CryptosRus, George Tung, this plan would involve purchasing up to 5% of the total bitcoin supply to establish a reserve intended for national debt repayment over the next two decades.

Tung explores the potentially explosive impact of this policy, which he says could lead to an unprecedented buying frenzy, with possible geopolitical ramifications.

Tung sees this buying pressure as massive, stating, "That's a lot of buying pressure. That is going to be a lot," especially considering the additional demand from ETFs, retail investors, and other entities. He speculates that U.S. purchases could provoke reactions from other countries, suggesting, "Do you think Putin and Xi...are going to sit back...and let the U.S. buy up 5% of the supply of bitcoin?" According to Tung, rival nations might escalate their own acquisitions, saying, "They might say, well, if they're going to buy 5%, we're going to buy 10%."

The scenario Tung describes grows even more intense if corporations join the race, such as BlackRock's speculated involvement. He asserts, "If four entities try to buy 40% of the supply...that alone will drive bitcoin into the millions." He highlights how limited the global supply of bitcoin is, mentioning that even smaller countries, like Bhutan and El Salvador, have already started acquiring significant amounts of bitcoin.

Fundstrat analyst Sean Farrell recently used the same logic to say he may need to adjust his $115,000 price target higher .

Emphasizing bitcoin's rarity, Tung states, "There’s just not enough to go around," noting that demand significantly outstrips supply. He argues that this scarcity combined with bitcoin’s fixed supply underpins its value, calling it "The scarcest asset that we have." To him, this is the primary reason bitcoin will continue to rise in value.

Finally, Tung underscores bitcoin's resilience against government control, saying, "It is the most valuable network on the planet...the only network that no country can block." In his view, the decentralized and unregulated nature of bitcoin, paired with its scarcity, renders it "The most priceless asset and network we have on the planet."