Originally published on: December 14, 2024
A crypto analyst predicts that if Senator Lummis’ proposal to have the US government acquire 5% of Bitcoin’s supply is approved, it could lead to increased price volatility in the short term.
Ben Simpson, the founder and CEO of Collective Shift, shared his insights with Cointelegraph, stating, “I expect it to be pretty volatile, especially if the strategic Bitcoin reserve gets approved; I think Bitcoin will pump then probably rotate back.”
Following Trump’s victory in the presidential election, Senator Cynthia Lummis of Wyoming, a Republican and crypto advocate, announced plans to introduce legislation for the US government to purchase 1 million Bitcoin and hold it for at least two decades.
Simpson also discussed the current market trends, suggesting that Bitcoin dominance is likely to decline as the market moves towards altcoins. He noted that altcoins have started to climb while Bitcoin has been consolidating around $100,000.
According to TradingView data, Bitcoin dominance has decreased by 7.20% over the past 30 days, indicating a shift towards altcoins. Crypto trader Momin predicts that this trend will continue, with altcoins potentially seeing significant gains in the coming week.
Despite the growing interest in altcoins, Simpson cautioned that the transition to altcoin season may not be smooth and could be marked by volatility. Bitfinex analysts also emphasized the continued relevance of Bitcoin in institutional portfolios, stressing its potential as a store of value.
As Bitcoin surpasses six figures and maintains strong demand, any dips in its price are viewed as short-term buying opportunities by many investors. VanEck, a global investment manager, reissued its $180,000 price target for Bitcoin at the peak of the current cycle, indicating a bullish outlook for the cryptocurrency market.
With the crypto bull market entering a new phase, analysts believe that Bitcoin will remain a key asset for major institutions and continue to attract growing interest from investors looking for a reliable store of value.
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