Especially when it comes to cryptocurrencies like Bitcoin, it’s not a good idea to follow in the footsteps of big players when announcing buying or selling assets or holding them (Cryptography: BTC). However, it is simply not recommended to ignore it when committing to something, especially since one player is so large.
On March 6, President Donald Trump issued an executive order directing the establishment of a strategic Bitcoin Reserve, stating that “Government BTC deposited in Strategic Bitcoin Reserve will not be sold.”
The executive order can be reversed by this or future president, but I think this is a big move in favor of Bitcoin. Here’s why we support the idea of investing in Bitcoin and holding it forever:
Investment papers for buying and holding Bitcoin indefinitely are pretty straightforward. Due to the voluntary constraints of that protocol, there are only 21 million bitcoins in total. Over time, the difficulty of mining Bitcoin increases, reducing the rewards of coins granted to miners and network validators in half for the same amount of calculation work.
The increased difficulty and halving ensure that the supply of new coins will become smaller and smaller over time, making it even more difficult for investors to raise coins at the same (or lower) price as before. As demand continues to rise, this works by increasing prices as supply decreases.
A key part of this process is that even if additional investors do not arrive to request more Bitcoin, prices should continue to rise as existing Bitcoin holders continue to commit to more purchases. And assuming that those holders are directed at holding coins forever or forever, when purchasing available supplies, it is roughly equivalent to removing a portion of the supply from the market, at least for quite some time. It makes sense for Bitcoin buyers to commit to keep it for a long time to help them shrink supply and raise prices.
Join the US Government, one of the world’s largest and richest organizations. According to an executive order issued on March 6, the government plans to not sell Bitcoin, which is obtained through the confiscation of civil or criminal assets.
Instead, they store those coins through strategic Bitcoin reserves, targeting indefinite and perhaps endless retention periods. Assuming that the country’s Bitcoin Reserve is actually implemented (and may not be so yet), it could be a bigger catalyst at a higher price.
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Before the executive order was issued, the government had sold a total of $17 billion in Bitcoin over the years. This is just a small portion of the outstanding supply of coins worth $1.7 trillion. Therefore, it is reasonable to say that the main owner of the coin has fundamentally changed its disposal so that it accumulates rather than distribution.
In other words, the US government may not be condemning buy orders, but as long as this is a presidential priority, it no longer condemns sell-out orders. As things go as Crypto Bulls hopes, the US government continues to accumulate more and more bitcoin, resulting in even scarcity of supply. And that’s an attractive reason to buy assets and hold them indefinitely.
Many states are also considering whether to form a stockpile of digital assets, as the federal government is aiming to do. There is no guarantee that these states, or the federal government, will actually track them down.
But that doesn’t mean you shouldn’t buy Bitcoin. This means that you should not be the only asset you have purchased now or ever. Make sure to diversify your portfolio before allocating money to cryptocurrencies. Even relatively secure tokens can be very volatile, so more secure assets take priority over cryptocurrency purchases.
And even if it gets difficult, you should promise to hold the coin. If you’re willing to play that worthy driver and make sure you’re happy to make a higher price for your enjoyment, then investing a lot of money over time doesn’t make much sense.
Have you ever felt like you missed a boat when buying the most successful stocks? If you do that, you’ll want to hear this.
In rare cases, a team of analysts issue “double-down” stock recommendations for companies they think they are trying to pop. If you’re worried about having already missed the opportunity to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
nvidia:If you invest $1,000 when it doubled in 2009,$299,728! *
Apple: If you invest $1,000 when it doubled in 2008, then $39,754! *
Netflix: If you invest $1,000 when it doubled in 2004, then $480,061! *
Currently, we are issuing “double-down” alerts to three incredible companies, and we may not have a chance like this anytime soon.
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*Stock Advisor will return as of March 14, 2025
Alex Carchidi has a Bitcoin position. Motley Fool has a position and recommends Bitcoin. Motley Fools have a disclosure policy.
Did Bitcoin get a catalyst at once? This is why it’s shopping now. Originally published by The Motley Fool
