Let’s Cover the Basics

What is Bitcoin?
Bitcoin is essentially a digital token—a virtual asset with no intrinsic value, whose price is determined entirely by market demand and supply. Initially associated with dark web transactions, Bitcoin has since evolved into an asset widely referred to as "digital gold."

What Can You Do With Bitcoin, and What Is Its Official Classification?

Bitcoin operates in a regulatory gray area, with no universal classification. While often referred to as a cryptocurrency or digital asset, there’s no globally recognized legal definition. As an investor or user, there are three main things you can do with Bitcoin:

  1. Buy it as an investment.

  2. Sell it for profits or losses.

  3. Hold it as a long-term store of value.

Despite the lack of formal classification, Bitcoin remains arguably the most valuable asset —and here’s why:

Crypto Market Flagship Asset

Bitcoin is the flagship of the cryptocurrency market. While there are numerous tokens—like Ethereum, Solana, and XRP—and meme coins—like Doge and Shiba—their price trends are heavily influenced by Bitcoin. If Bitcoin rises, it pulls the entire market up; if it falls, it drags everything down with it. This leadership status is a core reason for its dominance.

Bitcoin’s Road So Far

Bitcoin’s journey reflects its growing legitimacy:

  1. People’s Money: Initially adopted for underground transactions and personal trading.

  2. Large Investors’ Involvement: The 2017 bull run brought Bitcoin into mainstream financial discussions.

  3. Institutional Investments: Companies like Tesla and funds like Grayscale have since added Bitcoin to their portfolios.

And Bitcoin’s journey isn’t over—it’s entering its next phase.

What Drives Bitcoin Prices Lately?

Bitcoin’s price shot up to $90k following Donald Trump’s election. Why? Investors anticipate crypto-friendly policies and the potential for Bitcoin to gain governmental recognition. Here’s what’s fueling the optimism:

  1. Bitcoin as a Commodity
    There’s growing consensus that Bitcoin will soon be officially classified as a commodity, similar to gold or silver. This would eliminate regulatory ambiguity and establish Bitcoin as a safe haven for institutional and retail investors.

  2. Legislative Clarity
    Bills like the FIT21 Act aim to create a structured regulatory environment, making it easier for institutions to invest in Bitcoin without fearing sudden crackdowns.

  3. Bitcoin Strategic Reserve
    Speculation that the U.S. government might create a Bitcoin strategic reserve has further boosted investor confidence. Such a reserve would solidify Bitcoin’s role as a key financial asset in the global economy.

Powell’s Hawkish FED and the Recent Panic

Federal Reserve Chair Jerome Powell recently stated that Bitcoin wouldn’t be included in the national reserve, citing existing laws that list approved currencies. This led to a panic sell-off, dropping Bitcoin’s price by over 10% within hours.

However, Powell’s statement doesn’t close the door completely—it highlights the legal hurdles that need to be addressed. The U.S. government still has alternative paths to incorporate Bitcoin into a strategic reserve:

How the U.S. Could Include Bitcoin in Reserves

  1. Legislative Changes
    Congress could amend existing laws to include Bitcoin in the list of reserve assets. While Powell said this isn’t currently on the table, it’s a straightforward solution.

  2. Parallel Reserves via the Treasury
    The Treasury’s Exchange Stabilization Fund (ESF) isn’t bound by Federal Reserve guidelines and could acquire Bitcoin for strategic purposes. Historically, the ESF has been used flexibly to stabilize currencies during crises.

  3. National Sovereign Wealth Fund (SWF)
    The U.S. could establish a Bitcoin-backed SWF, similar to oil-based funds in Norway. This would allow Bitcoin to act as a buffer during economic instability while benefiting from its long-term price appreciation.

  4. Reclassify Bitcoin as a Commodity
    Reclassifying Bitcoin under U.S. law as digital gold would facilitate its inclusion in reserves and align with its perception as a store of value.

The Geopolitical Angle: Lessons from Russian Oligarchs

During the war in Ukraine, Russian oligarchs saw their traditional assets frozen by sanctions. If those assets had been in Bitcoin, they wouldn’t just have remained accessible—they could have tripled in value during the same period.

As the geopolitical landscape evolves, individuals and nations alike are recognizing Bitcoin’s potential as a hedge against sanctions and instability. With Trump’s promise to take a hard stance on foreign adversaries, Bitcoin could gain traction as a neutral, apolitical asset.

Conclusion

Bitcoin’s fundamentals remain strong. While speculative forces drive short-term price movements, the long-term case for Bitcoin is built on scarcity, decentralization, and growing institutional interest. With potential governmental recognition and strategic reserve discussions on the horizon, Bitcoin is well-positioned for its next chapter.

So, why would you want to buy Bitcoin? Because it’s not just an investment—it’s a piece of the future financial system.

Let me know what do you think in comments, correct or ague, please.

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