A strategic Bitcoin reserve by the US could lead to global economic shifts, with nations and corporations potentially adopting Bitcoin reserves, impacting its price and use. This could drive corporate and individual adoption, positioning Bitcoin as a hedge against inflation and a medium for transactions. The move might also enable sanction evasion and influence corporate valuations, aligning with predictions of increased demand and price appreciation.
Deutsche Bank predicts that the upcoming bitcoin halving event is already partially priced in and does not expect a significant rally in the cryptocurrency's price afterward. The bank anticipates a shift in the geography of crypto mining to countries with lower energy costs due to reduced block rewards. Despite this, the report highlights positive factors such as the launch of spot bitcoin ETFs, the performance of Bitcoin Cash after its halving, and the potential for future spot ether ETF approvals, central bank rate cuts, and regulatory changes to support the cryptocurrency market.
The upcoming Bitcoin halving will reduce the block reward for miners, leading to an increase in transaction fees and highlighting the limited supply of Bitcoin. This may drive consumer adoption of second-layer networks like the Lightning Network, which offer faster and cheaper transactions. As Bitcoin becomes more widely adopted, network fees are likely to steadily increase, making it more comparable to traditional currencies and potentially providing a solution for financially disenfranchised individuals without bank accounts.
The IRS has released the results of its analysis of 2020 tax returns to determine the intensity of cryptocurrency adoption in different areas of the United States. The data reveals that California has the highest number of locales with a high percentage of cryptocurrency ownership, but Washington state ranks higher when considering the state as a whole. The analysis also shows a significant difference in cryptocurrency uptake between states, with a 13-fold difference between Washington and West Virginia among upper-bracket taxpayers. The data suggests that younger populations and a higher concentration of programmers and data scientists contribute to higher cryptocurrency adoption rates. Additionally, blue states tend to have a higher prevalence of crypto ownership, although there are exceptions such as Maine and Texas. The analysis also identifies specific neighborhoods with high rates of cryptocurrency ownership, including areas near tech company headquarters and affluent residential areas.
Liechtenstein's Prime Minister, Daniel Risch, has reportedly announced plans to add bitcoin as a payment option for government services. Any crypto received will likely be immediately exchanged for Swiss francs, the country's national currency. Although crypto is currently considered too volatile to entrust portions of the country's multi-billion dollar annual savings, Risch signaled that this assessment could change in the future.
Bitcoin and Ethereum remained relatively stable this week, with Dogecoin experiencing a brief rally after Elon Musk's endorsement. Ethereum's upcoming "Shapella" network upgrade is expected to unlock withdrawals of staked ETH. Ralph Lauren, BTG Pactual, and PostFinance all announced crypto adoption initiatives, including accepting cryptocurrency payments, launching a stablecoin, and offering regulated crypto services.
