Bookmakers at Polymarket report that the odds of former President Donald Trump announcing US Strategic Bitcoin Reserve dropped.

There was initial speculation that Trump would unveil a bold strategy to include bitcoin in the US strategic reserves at this week’s Bitcoin 2024 conference.

However, the current bookmaker odds only indicate 26% opportunity such a declaration by July 28. Reflecting a significant shift in market sentiment, this is in keen contrast to the 76% probability originally assigned to the concept.

There are other reasons for the sudden loss of confidence, including current political events. The news that President Joe Biden is withdrawing from the presidential election may have distracted attention from speculation about the Bitcoin reserve. The cryptocurrency community and financial experts are adjusting their expectations as the thrill wears off.

Source: Polymarket

Have the emotions subsided?

Starting with a tweet from Satoshi Act co-author Dennis Porter, the hype surrounding Trump’s possible announcement of a bitcoin reserve was aimed at realistically defining bitcoin as the country’s strategic currency reserve, which raised hopes among investors and bitcoin enthusiasts.

Although immediately intense, the speculative flame has since died down. The inclusion of Bitcoin in the national reserves is fraught with difficulties, including administrative complexity and legal hurdles.

If such a plan were to go ahead, the U.S. Department of Justice’s current bitcoin holdings—around 200,000 units—would have to be transferred to the Treasury Department. This approach in itself poses significant political and administrative challenges.

Trump: The Strategic Reserves Dilemma

The inclusion of Bitcoin in the US strategic reserves could provide a special diversification of the country’s asset portfolio. Such a move, according to analysts such as Markus Thielen, CEO of 10x Research, could reduce the dependence on conventional assets such as gold and foreign currencies.

The potential benefits are obvious considering the US holds about $15 billion worth of Bitcoin, while its gold holdings stand at $600 billion.

Image: Chainalysis

Still, there are some really significant practical difficulties. DAIM CEO and founder Brian Korshain notes that while the idea of ​​a Bitcoin strategic reserve is “feasible,” its implementation is fraught with challenges.

Moving Bitcoin from being held by the Justice Department to the Treasury would require overcoming significant procedural and regulatory hurdles. Including Bitcoin in the reserve system would also force a fundamental change in the American management and perception of the nation’s resources.

All eyes will be on Trump and his possible comments on Bitcoin and the larger cryptocurrency market as Bitcoin 2024 plays out. The keen drop in betting odds for now points to a possible fantasy more than reality surrounding the U.S. digital asset reserve. Enthusiasts and investors alike will need to stay tuned for further developments in the cryptocurrency market.

Featured image from Pexels, chart from TradingView