Explore our expert analysis here on the SEC’s next move and its implications for XRP’s future.
Strategic Bitcoin Reserve Developments Drive BTC Demand
Meanwhile, bitcoin (BTC) revisited the $105k handle intraday on Friday amid reports of President-Elect Donald Trump prioritizing crypto policies.
Speculation around a Strategic Bitcoin Reserve (SBR) also intensified.
On Friday, Senator Cynthia Lummis commented:
“Working hard to get the Strategic Bitcoin Reserve and comprehensive digital asset legislation across the finish line.”
Senator Lummis introduced the Bitcoin Act in December, proposing the US government accumulate one million BTC, 5% of the total supply over five years. A US SBR would significantly tilt the supply-demand balance firmly in BTC’s favor.
Deaton recently suggested BTC could reach $1 million if the US government passes Senator Lummis’ bill, saying,
“If the U.S. Government (USG) passes Senator Lummis’ Bill and begins buying BTC, it will no doubt cause other nations to follow suit, just like with gold. It could literally create Nation State FOMO, and if that occurs, $1M per BTC happens a lot faster than people think.”
US BTC-Spot ETF Market Eyes Three-Day Inflow Streak
On January 16, the US BTC-spot ETF market reported net inflows of $626.1 million as investors considered the prospects of an SBR. The US BTC-spot ETF market could see a third day of inflows on January 17, boosting BTC demand. According to Farside Investors:
- Fidelity Wise Origin Bitcoin Fund (FBTC) saw net inflows of $326.3 million on January 17.
- Bitwise Bitcoin ETF (BITB) reported net inflows of $208.1 million.
Excluding flow data for BlackRock’s (BLK) iShares Bitcoin Trust (IBIT) and ARK 21Shares Bitcoin ETF (ARKB), the US BTC-spot ETF market reported net inflows of $599.7 million. Seven of the eleven issuers registered net inflows, underscoring market expectations of a surge in BTC demand.
BTC could get a further boost in demand if Trump repeals President Biden’s veto of the SEC’s SAB 121 regulation vote.
Staff Accounting Bulletin 121 (SAB 121) is an SEC requirement for companies, including banks, to hold crypto assets on their balance sheets even if they hold the cryptos under customer custody. The regulation makes it expensive for banks to hold crypto under custody for clients, limiting crypto services and BTC demand.
Bitcoin Price Outlook
On Friday, January 17, BTC advanced by 3.94%, reversing Thursday’s 0.25% loss to close at $103,733.
BTC’s price trajectory remains hinged on US BTC-spot ETF flow trends and Strategic Bitcoin Reserve (SBR) developments.
BTC-spot ETF inflows and favorable US SBR developments could push BTC toward its record high of $108,231. Conversely, weak support for an SBR on Capitol Hill or a resumption of BTC-spot ETF outflows could drag BTC toward $95k.
As Trump’s inauguration looms, traders should monitor the news wires for crypto-related chatter.
