Does a US Bitcoin 'Strategic Reserve' Make $115K Bitcoin Even More Likely?

As the dust settles from one of the most pivotal U.S. elections in recent memory, investors are bracing for what a second Trump term and potential Republican sweep could mean for the crypto market.

But what does this mean for Bitcoin’s price, the broader altcoin market, and investor opportunities? Fundstrat’s Head of Digital Asset Strategy, Sean Farrell joined Coinage to explain why the election results could mean even his $115,000 year-end price target might not be bullish enough.

The trickiest update to modeling Bitcoin's path could be the challenge of estimating the likelihood of Republicans making good on their promise to establish a U.S. strategic Bitcoin reserve.

As Farrell put it, “that’s kind of what I’m trying to get my head around right now in terms of what kind of premium I’d put on that.” Should the proposal move forward, it could spark “some kind of game-theoretical outcome among different, you know, sovereign nations,” potentially driving Bitcoin even higher.

The idea of a U.S. Bitcoin strategic reserve, which emerged during Trump’s campaign, now feels less like political theater and more like a real possibility. With the Republicans in control of both chambers, a path to enactment could open, adding an extra layer of intrigue. Odds now are "definitely not zero,” Farrell remarked on the likelihood of the proposal gaining traction.

If enacted, Farrell believes it could put a “pretty significant…premium” on his $115,000 target, though he admitted that the proposal introduces questions around “execution” and pricing.

Despite just two months left in 2024, Farrell’s optimistic outlook on Bitcoin hasn’t wavered. He reaffirmed his ambitious target of $115,000, highlighting that favorable macroeconomic conditions could drive Bitcoin to new heights. He pointed to “the macro backdrop” as “very constructive for liquidity-sensitive assets like Bitcoin,” noting factors like the Fed’s dovish stance and China’s economic stimulus as key drivers that create a “pretty good setup” for Bitcoin’s continued growth.

Regulatory Relief and the Altcoin Market Boom

With the election signaling a friendlier regulatory landscape for crypto, Farrell sees major opportunities emerging in the altcoin market. Tokens like Uniswap, Lido, and Aave, which have revenue models but held back due to regulatory uncertainties, are poised to benefit from a more stable regulatory outlook. As Farrell sees it, “we’re going to see a lot of very good opportunities in the altcoin market over the next quarter and into next year.”

Farrell also noted the re-emergence of Coinbase’s U.S. premium as another bullish indicator for the market. While he acknowledged that investors are “still kind of waiting for a…proverbial shoe to drop,” he pointed out that the U.S. premium, coupled with “funding rates still pretty subdued” and “not a lot of leverage in the market,” signals room for further gains.

For investors looking to capture upside outside of Bitcoin, Farrell highlighted a number of high-conviction assets:

• Coinbase: With the new political landscape, Coinbase’s outlook appears promising. “This was massive for Coinbase,” Farrell said, referring to the election’s implications on the SEC’s regulatory approach. He sees the possibility of expanded altcoin listings on Coinbase as a growth driver, and noted the company’s crypto assets on its balance sheet as an added bonus. If altcoins appreciate, “it will certainly benefit their book value.”

• Solana Ecosystem: Farrell remains optimistic on Solana and related projects, calling it part of “the casino stack” where people are “speculating on chain.” The Solana ecosystem, he explained, has built a “pretty massive” user base and liquidity pool, making it well-positioned even as new high-throughput chains like Sui and Aptos gain traction.

• Bitcoin Miners: If Trump’s pro-Bitcoin stance fosters a “pro-Bitcoin and pro-energy independence regime,” Farrell believes miners like Core Scientific and TerraWulf will thrive. These miners not only produce Bitcoin but also provide high-performance computing services, setting them up well for the anticipated shift toward energy-driven growth.

Looking Ahead

As we enter the year-end stretch, Farrell’s outlook remains positive. “It’s an extremely bullish setup into year-end and next year,” he noted, while also emphasizing the need to monitor macro conditions. Risks remain, particularly with bond market volatility, but the potential for increased institutional participation and the easing of regulatory pressures could be game-changing for the sector.

For Farrell, a “very constructive” macro environment, regulatory clarity, and rising institutional interest have set the stage for a new era of crypto investment. As he succinctly put it, “the setup is there.” With his targets intact, Farrell’s bullish stance reflects his confidence that the next wave of growth in crypto is just beginning.

Coinage members can watch our full interview with Sean Farrell above. To support our community-owned outlet, own it with us, and unlock other exclusive benefits, mint one of our Membership Passes today or Stake with us today! Chat with Coinage in our Discord.