Bitcoin may get closer to the government table. Morgan Stanley noted that the world’s largest cryptocurrency is now large enough to be held as a reserve asset in the United States. The bank sees Bitcoin’s $10.7 trillion market cap as one of the reasons why the concept is no longer a fantasy.
But there is a catch. The price of Bitcoin is still too crazy. This volatility makes it a risky bet, especially when compared to other reserve currencies such as the US dollar, the euro or the Japanese yen. Despite the numbers showing it is growing, Morgan Stanley warns that stability remains a major issue.
Source: CryptoRank
Our Eye Strategy Bitcoin Reserve
With this development, US President Donald Trump has taken a step forward. Back in March, the Trump administration introduced a new executive order directing the administration to set up a federal agency to hold Bitcoin. Its discussion is similar to how gold is deposited into Fort Knox.
BTCUSD trading at $96,820 on the 24-hour chart: TradingView.com
Strategic Bitcoin reserves are currently on the political agenda. Supporters say the action has the potential to give the U.S. a lead in crypto policy and consolidate its financial future. Some even claim that it can help state debt.
According to Morgan Stanley, if the U.S. is to maintain 12% to 17% of the highest cryptocurrency, it would be comparable to the processing of other currencies in global reserves. This will involve sitting around $370 billion in BTC to equal the importance of its international market.
Serious report @morganstanley.
– Bitcoin has enough market capitalization to be a reserve, but is more volatile than other reserve currencies.
– Volatility is decreasing.
– Allocating $370B to Bitcoin will reflect the market cap ratio.
– 12%-17% of the total Bitcoin supply pic.twitter.com/rffjdobw5z– Troy Cross (@thetrocro) May 6, 2025
Britain and Switzerland say no
While this happens, the European government is keeping its distance. The UK has rejected the possibility of keeping Bitcoin. At the FT Digital Assets Summit, Economic Secretary Emma Reynolds said the government would consider regulating cryptocurrencies and applying blockchain to public finances, but not holding BTC.
In Switzerland, the central bank also made the decision: During the annual meeting, Swiss National Bank president Martin Schlegel said that cryptocurrencies do not provide long-term protection of the value required for reserves. He puts a sudden drop in liquidity as one of the main threats.
Volatility remains the main problem
Although Bitcoin enthusiasts can envision the future, currency experts answered that price fluctuations are still too much. Bitcoin backer Troy Cross admits that the current volatility is high, making it difficult to label assets as “ready”. But he also pointed out that if these volatility falls below the important threshold, the argument for encryption will be even stronger.
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