Trump officially announces the establishment of a Bitcoin strategic reserve, will this become a turning point for Bitcoin?

The US currently holds $748 billion in gold reserves, while Bitcoin's market capitalization is around $1.6 trillion.

If the government establishes a reserve similar to gold, it may drive a 50% increase in the Bitcoin price.

Remember, between September 2024 (before the election) and December 2024 (after Trump's victory), Bitcoin surged 94%. At that time, rumors about Bitcoin reserves had already started to circulate.

This means that the narrative of the reserve may have already been digested by the market. Meanwhile, Bitcoin is also now facing other risks, such as the recent crash in the US stock market.

However, we still believe that the importance of the reserve announcement may exceed people's expectations, and this move may lay the foundation for a major Bitcoin rally in 2025. After all, the US is not the only country with a strategic reserve.

The total global gold reserve is around $2 trillion, which exceeds Bitcoin's market capitalization. Furthermore, the US government holding Bitcoin adds credibility to this asset class, and Bitcoin's prosperity is built on trust and confidence.

Since December 2022, the Bitcoin bull market has been driven primarily by institutional adoption. The launch of the Bitcoin ETF in November 2023 sparked a huge wave of optimism, and since then, Bitcoin has risen 85%.

In our view, this is very similar to the adoption of gold in the early 2000s: the first US gold ETF was launched in November 2004, marking the beginning of a 400% bull market over the following years.

But the gold bull market was not a one-time event. The rise was gradual, with multiple corrections along the way.

If we compare the gold bull market of the 2000s with the current Bitcoin rally, the patterns are very similar. This correction may be painful, but it does not seem to negate the overall trend of institutional adoption.