Proposal calls for permanent reserve
Merkle says the ARMA Act would only have a long-term impact on Bitcoin prices. Reuters
The American Reserve Modernization Act (ARMA Act) proposes a US strategic Bitcoin reserve, as investors watch whether the legislation provides a long-term uptick for Bitcoin demand and creates a role for the cryptocurrency as a government-held asset.Thanalop Preedamanoch, head of investment and fund manager at Merkle Capital, said major Bitcoin rallies have historically been driven by new sources of demand. Retail investors played a key role in the 2021 bull market, while institutional demand accelerated in 2024 following the introduction of spot Bitcoin exchange-traded funds.
The next major source of demand could come from governments, with the US potentially setting the direction for other countries.
The ARMA Act seeks to switch the strategic Bitcoin reserve from an executive policy into a permanent legal framework, which could reduce the risk of future administrations reversing the policy and selling government-held Bitcoin, he said.
