Elon Musk, the Tesla billionaire who this week issued a stark U.S. “bankruptcy” warning, has joined the celebrations as the bitcoin price rockets past $100,000.
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The bitcoin price has continued its massive 2024 rally in the aftermath of U.S. president-elect Donald Trump’s White House victory—with the market still braced for a looming Trump bombshell.
Now, after Musk confirmed a bitcoin and crypto price game-changer, traders and analysts are speculating whether Musk wading back into the bitcoin trenches of X increases the chances of a U.S. bitcoin strategic reserve.
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Elon Musk has become a close advisor to U.S. president-elect Donald Trump, helping the bitcoin price … [+]
“With [bitcoin and crypto’s] most famous cheerleader in Elon Musk at [Trump’s] side, we can expect the most pro-cryptocurrency administration to date,” Richard Ptardio, cryptocurrency and financial markets analyst, said in emailed comments.
Musk has become an influential advisor to Trump following his election, reportedly weighing in on cabinet position picks and creating the Doge department of government efficiency, which Musk has said he believes could strip $2 trillion from U.S. spending.
Musk has—at least publicly—fallen out of love with bitcoin and crypto more broadly since the 2021 bull run that saw his Covid-era Twitter posts help push the price of the meme-based bitcoin rival dogecoin to dizzying heights—once calling it the future currency of Earth.
The Doge department is a nod to the shiba inu doge meme that’s also linked to the dogecoin cryptocurrency, named by Musk as his “favorite” cryptocurrency and accepted as payment by his Tesla car company—though Tesla continues to hold around 10,000 bitcoin worth almost $1 billion on its balance sheet.
“The biggest potential prize for bulls would be a bitcoin strategic reserve in the U.S.—an idea mooted earlier this year by Republican senator Cynthia Lummis,” said Ptardio. “There certainly seems to be growing support, and advocates can point towards the strong returns El Salvador’s government has seen on its own bitcoin investments.”
Lummis’ bill, entitled Boosting Innovation, Technology and Competitiveness Through Optimized Investment Nationwide (BITCOIN) Act, proposes the U.S. buy 1 million bitcoins over five years to reduce the spiraling, $35 trillion U.S. national debt—something that’s become major issue for many.
Following the bitcoin price climbing over $100,000, Musk called the $333 million worth of profit made by El Salvador’s bitcoin investment “impressive,” replying to a post by the country’s bitcoin-backing president Nayib Bukele, who Musk met earlier this year.
“It’s happening,” posted a popular Elon Musk and bitcoin fan account in response, referring to the possible creation of a bitcoin strategic reserve.
“He is back,” Steven Lubka, head of private clients and family offices at bitcoin buying platform Swan Bitcoin, posted to X in response to a Musk comment on bitcoin breaking the $100,000 price level.
In July, Trump promised to create a “strategic national bitcoin reserve” and predicted bitcoin could eclipse gold’s $16 trillion market capitalization during an appearance at the Bitcoin 2024 conference.
“The possibility of a bitcoin strategic reserve is intriguing to us because the market is likely under pricing the magnitude of the move that could result in the first half of 2025 should this become a reality,” Benoit Bosc, a former portfolio manager at Millennium who launched a crypto advisory business last month, said in emailed comments.
However, many bitcoin and crypto watchers still see the creation of a U.S. bitcoin strategic reserve as unlikely—with the odds on the Polymarket prediction platform showing a likelihood of 25% that Trump will create a bitcoin fund within his first 100 days.
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The bitcoin price has rocketed over $100,000 per bitcoin for the first time, helped by Donald Trump … [+]
“I am thinking of 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 far too low for next year,” referring to his bitcoin price prediction.
“Trump’s Treasury secretary nominee, Scott Bessent, has a history of supporting crypto, sparking hope about the possible creation of a bitcoin strategic reserve,” Fadi Aboualfa, head of research at bitcoin and crypto custodian Copper, said in emailed comments. “Yet hope can often be deceptive. The U.S. Treasury’s gold buying operations are minimal—why would they take a radically different approach to bitcoin?”
Aboualfa suggested the U.S. could halt the sale of bitcoin it’s seized from criminals—”This would enable the beginnings of a strategic reserve from already-confiscated assets—an inherently bullish idea and a sharp break from the status quo.”