Note that some industry participants are sceptical about the idea of forming a national Bitcoin reserve. On the eve of such an opinion was shared by the former head of the crypto exchange BitMEX Arthur Hayes.

He believes that in the end it may simply not come to such a thing. Well, the market will react negatively to Trump’s inauguration, as the inability of the newly elected president to quickly change the situation with the regulation of crypto will become obvious.

How will Bitcoin grow?

Local governments in individual states, following the example of Texas and Pennsylvania, are also considering similar crypto proposals. Globally, the issue remains relevant too, with the Russian Federation, Thailand and Germany also considering the prospect of accumulating digital assets.

If governments start competing to create their own bitcoin reserves, will the crypto market’s famous four-year cycle of ups and downs become a thing of the past?

As a reminder, the cryptocurrency industry has been moving in cycles since its inception. In general, the stage of decline and growth of the market occurs in about four years. For example, Bitcoin's peak on the bullrun before last was reached in December 2017, and on the past - in November 2021. This is why experts believe that the peak of the current growth phase will be recorded next year.

Nexo analyst Ilia Kalchev believes that “the law on forming a crypto reserve could be a turning point” for the cryptocurrency, confirming its status as a legitimate global financial instrument. Here’s a rejoinder to this, as quoted by Cointelegraph.

Every cycle is accompanied by the narrative that “this time it will be different”. The conditions have never been more favourable. Never before has the crypto industry had a pro-crypto U.S. president and a loyal Senate and Congress.

Cryptocurrency market cycles

Lummis’ proposed bill would allow the US government to include Bitcoin in the Treasury as a reserve asset, purchasing 200,000 BTC annually for five years. The plan is to accumulate one million Bitcoins in this way, which would be stored without movement for at least twenty years.

Strike founder and CEO Jack Mallers believes that Trump could very well “issue an executive order to buy BTC on the first day after the inauguration.” Although he noted that it’s unlikely the government would immediately spend huge sums to invest in the first cryptocurrency.

Dennis Porter, co-founder of the Satoshi Act Fund organisation, also believes that Trump is considering creating a strategic bitcoin reserve by direct decree.

So far, Trump’s team has not directly confirmed claims that they are ready for such an initiative. However, earlier in an interview on CNBC, Trump was asked if the US would create a crypto reserve similar to an oil reserve. The president-elect responded in the affirmative.

Republicans gained a majority in the Senate after the November elections

However, an executive order will not provide stability in public policy, as subsequent presidents often reverse such decisions. The only way to ensure the long-term existence of the strategic reserve may be a law that has majority support in the government.

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BTC supporters in Trump’s inner circle have a solid ground to push the Lummis bill, as Republicans dominate Congress and have a slight advantage in the Senate. However, a few Republicans tilted by progressive opposition could still derail the bill’s passage due to concerns in the context of dollar stability.

Another problem: claims that “this cycle will be different” have been made in every past crypto market cycle, backed by stories of mass and institutional adoption. During the bull trend of 2013-2014, the supercycle theory was supported by ideas that Bitcoin would capture international interest as an alternative asset.

Changes in Bitcoin’s value in 2024

In the 2017-2018 cycle, rapid price growth was seen as a sign of massive financial acceptance and the beginning of Bitcoin’s recognition by institutions. In the 2020-2021 trend, as tech companies like MicroStrategy, Square and Tesla entered the market, it was thought that many other corporate players would follow suit.

However, in each cycle, the supercycle narrative failed to materialise and a price crash followed, culminating in a prolonged bear trend. Three Arrows Capital (3AC) co-founder Su Zhu has been the most prominent proponent of the supercycle theory since 2021. Back then, he argued that the crypto market would remain in a bullish phase for years to come, with Bitcoin eventually reaching a price of $5 million. However, this ended up turning out to be a fiction.

3AC did borrow funds as if the supercycle theory was real, but when the fund faced forced liquidation due to its own mistake, the industry’s capitalisation plummeted by almost 50 per cent in a matter of months.

The collapse brought bankruptcies and financial difficulties to creditors such as Voyager Digital, Genesis Trading and BlockFi. That is, overall, the supercycle theory is a dangerous bet for those willing to risk their savings. And at least as of today, it has never become a reality.

Although the crypto industry is now closer to mass popularisation than ever before in any case. The actual differences in this growth phase are the availability of spot Bitcoin-ETFs on US exchanges, and the desire of entire nations to accumulate digital assets. Of course, this affects the crypto’s reputation in the eyes of ordinary investors.


Talks about the unique and "not so" growth cycle of cryptocurrencies do come up every bullrun. However, each time before they have failed to materialise, well, the coin industry has continued to move within a four-year framework. So far, there's no reason to believe that such a thing won't happen this time around.

Look for more interesting stuff in our cryptocurrency chat room. Check back today.

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