Elon Musk quietly pushes US Bitcoin reserve bets as price breaks $100,000

Elon Musk, the Tesla billionaire who issued a stark “bankruptcy” warning for the US this week, has joined the celebrations as the price of Bitcoin shot past $100,000.

Unlock over $3,000 worth of NFT, Web3 and Crypto Benefits – Apply Now!

Following US President-elect Donald Trump’s victory in the White House, Bitcoin price has continued its massive rise in 2024 – with the market still bracing for a looming Trump bombshell.

Now that Musk has confirmed a major shift in Bitcoin and crypto prices, traders and analysts are speculating whether Musk’s return to the Bitcoin trenches of X increases the chances of a strategic Bitcoin reserve in the US.

Register now for free CryptoCodex—A daily five-minute newsletter for traders, investors and cryptocurrency enthusiasts to keep you informed and updated on the bull market in the Bitcoin and cryptocurrency markets

ForbesWith his clear “bankruptcy” warning, Tesla boss Elon Musk is triggering calls for a radical solution in the USAFrom Billy Bambrough

“With (Bitcoin and crypto’s) most famous cheerleader Elon Musk at (Trump’s) side, we can expect the most cryptocurrency-friendly administration yet,” cryptocurrency and financial markets analyst Richard Ptardio said in emailed comments.

After his election, Musk became an influential advisor to Trump. He has reportedly influenced cabinet positions and created the Doge Department of Government Efficiency, which he says could save $2 trillion in U.S. spending.

Musk has turned away from Bitcoin and cryptocurrencies more broadly – at least publicly – since the 2021 bull market, in which his Covid-era Twitter posts helped drive the price of meme-based Bitcoin competitor Dogecoin to dizzying heights – he once called it the future currency of the earth.

The Doge division is a nod to the Shiba Inu Doge meme, which is also linked to the cryptocurrency Dogecoin, which Musk describes as his “favorite” cryptocurrency and is accepted as payment by his Tesla car company – although Tesla continues to hold around 10,000 Bitcoin worth nearly $1 billion on its balance sheet.

“The biggest potential prize for bulls would be a strategic Bitcoin reserve in the US – an idea put forward by Republican Senator Cynthia Lummis earlier this year,” Ptardio said. “There certainly appears to be growing support, and advocates can point to the strong returns that the government of El Salvador has made from its own Bitcoin investments.”

After Bitcoin price soared above $100,000, Musk called El Salvador’s $333 million profit from Bitcoin investment “impressive,” responding to a post by the country’s Bitcoin-supporting President Nayib Bukele, who Musk met earlier this year.

“It’s happening,” responded a popular account owned by Elon Musk and Bitcoin fans, referring to the possible creation of a strategic Bitcoin reserve.

“He’s back,” posted Steven Lubka, head of private clients and family offices at Bitcoin purchasing platform Swan Bitcoin

In July, during an appearance at the 2024 Bitcoin Conference, Trump pledged to create a “strategic national Bitcoin reserve” and predicted that Bitcoin could eclipse gold’s $16 trillion market cap.

“The possibility of a strategic Bitcoin reserve is intriguing to us as the market is likely underestimating the magnitude of the move that could result in the first half of 2025 if this becomes a reality,” said Benoit Bosc, a former portfolio manager at Millennium launched a crypto consulting firm last month, it said in emailed comments.

However, many Bitcoin and crypto watchers still believe the creation of a strategic US Bitcoin reserve is unlikely – odds on prediction platform Polymarket show a 25% chance that Trump will create a Bitcoin fund within his first 100 days.

Register now for CryptoCodex– A free, daily newsletter for those interested in crypto

ForbesElon Musk has just quietly confirmed that there will be a huge change in the prices of Bitcoin and cryptocurrenciesFrom Billy Bambrough

“I view it as a low probability (less than 10%), high impact event,” Geoff Kendrick, global head of digital assets research at Standard Chartered, said in emailed comments. “If it happens, $200,000 is way too low for next year,” he said, referring to his Bitcoin price prediction.

“Trump’s nominee for Treasury Secretary, Scott Bessent, has a long history of supporting crypto, raising hopes for the possible creation of a strategic Bitcoin reserve,” said Fadi Aboualfa, head of research at Bitcoin and crypto custodian Copper, in via E Comments sent via email. “But hope can often be deceptive. The US Treasury’s gold buying operations are minimal – why should it take a radically different approach to Bitcoin?”

Aboualfa suggested that the US could stop the sale of the Bitcoins confiscated from criminals – “This would allow the start of a strategic reserve of already confiscated assets – an inherently optimistic idea and a sharp break from the status quo.”