Summers also questioned the practicality of holding Bitcoin as a national reserve. Meanwhile, major firms like BlackRock, MARA Holdings and MicroStrategy are doubling down on Bitcoin accumulation. BlackRock added 7,750 BTC via its ETF and MicroStrategy reported more than $17 billion in unrealized Bitcoin profits after its jump past $100K. Additionally, Trump's nomination of Paul Atkins as SEC chair attracted a lot of praise from crypto leaders, who see it as a very positive development for the crypto industry.
Lawrence Summers Questions Logic of Strategic Bitcoin Reserve
Former United States Treasury Secretary Lawrence Summers strongly criticized President-elect Donald Trump’s proposal to establish a strategic Bitcoin reserve. Summers even called it “crazy” and a political maneuver that is aimed at pleasing crypto campaign donors.
On Bloomberg TV on Dec. 6, Summers dismissed the idea of a national Bitcoin reserve as impractical, and questioned the rationale behind the government holding a "sterile inventory" of Bitcoin. He also argued that while reserves of commodities like oil and gold actually have historical and practical significance, accumulating Bitcoin lacks a compelling justification.
Summers on Bloomberg TV (Source: YouTube)
Summers suggested that the concept is primarily driven by political interests, and stated that this move will serve as a way to pander to wealthy crypto donors. Trump previously suggested that the U.S. government should hold on to the approximately 198,000 BTC it seized, which is worth more than $19 billion. Some Trump-aligned Republicans, including Senator Cynthia Lummis, are also advocating for legislation that will see the government buy and hold 1 million BTC for at least twenty years.
U.S. government Bitcoin holdings (Source: Arkham Intelligence)
While Summers dismissed the notion of a Bitcoin reserve, he did acknowledge that some of Trump’s broader comments on crypto regulation have merit. He agreed that financial innovation should be supported and suggested that regulatory overreach may have stifled crypto’s potential. Summers served as Treasury Secretary from 1999 to 2001, and advised crypto conglomerate Digital Currency Group in 2016.
Supporters of Lummis’ Bitcoin reserve proposal argue it could be a tool to address the nation’s over $36 trillion debt. However, critics like Avik Roy, the president of the Foundation for Research on Equal Opportunity, warned against overestimating Bitcoin’s role in dealing with fiscal challenges. At a recent crypto summit, Roy stated that while a Bitcoin reserve might have some benefits, it does not address the underlying issue of federal deficits.
Major Players Scoop up More Bitcoin
The crypto industry certainly has a lot more faith in Bitcoin than Lawrence Summers. Bitcoin-stacking activities surged after major firms and a crypto whale took advantage of the crypto’s recent price drop to $92,957 on Dec. 5. Leading the purchases was BlackRock, which bought 7,750 Bitcoin through its spot Bitcoin exchange-traded fund (ETF). This brought BlackRock’s total Bitcoin holdings to $46 billion. Thomas Fahrer, the founder of Apollo, even called BlackRock’s ETF the “fastest growing ETF ever.”
Meanwhile, Bitcoin miner MARA Holdings also bought 1,423 Bitcoin worth $139.5 million across multiple transactions. The acquisitions happened after the closing of the company’s second $850 million convertible note offering, which MARA earmarked for Bitcoin accumulation. With these purchases, MARA’s total Bitcoin holdings rose to 22,108 Bitcoin, worth $2.17 billion. This is a 162% increase compared to last month.
An anonymous crypto whale also took advantage of the price dip by purchasing 600 Bitcoin worth close to $58.9 million. Blockchain data revealed that the whale’s wallet address became active just a few weeks earlier. Its first transaction was recorded on Nov. 24.
Additionally, health-tech firm Semler Scientific joined the Bitcoin-stacking trend, and bought 303 Bitcoin on Dec. 4 at an average price of $96,779. The purchases were made just hours before Bitcoin’s price surpassed the $100,000 mark. This brought Semler’s holdings to 1,873 Bitcoin, valued at $182.8 million.
Public firms collectively hold about 527,026 Bitcoin, which is 2.66% of Bitcoin’s total supply. Governments hold 2,856 Bitcoin, while asset management firms and private companies hold 1,253 Bitcoin and 410,418 Bitcoin, respectively.
MicroStrategy’s Bitcoin Profits Soar
MicroStrategy’s aggressive Bitcoin investment strategy resulted in over $17 billion in unrealized profits, according to data from MSTR Tracker. Since 2020, the company purchased more than $23 billion worth of Bitcoin under the guidance of founder Michael Saylor. After Bitcoin surpassed $100,000 per coin for the first time on Dec. 4, MicroStrategy’s Bitcoin holdings swelled to a value of more than $40 billion.
MicroStrategy Bitcoin holdings (Source: MSTR tracker)
The company’s strategy not only paid off in cryptocurrency gains but also propelled its stock to exceptional heights. MicroStrategy’s shares surged more than 463% year-to-date, outpacing almost every stock in the S&P 500. As of Dec. 5, the company had a market cap of close to $90 billion, which is more than double the value of its Bitcoin holdings.
MicroStrategy share price YTD (Source: Google Finance)
Analysts predict that the stock could continue to grow due to its accelerating Bitcoin acquisition strategy. Benchmark fintech analyst Mark Palmer recently raised his price target for MicroStrategy’s shares from $450 to $650, though the stock currently trades around $386.
After its success, MicroStrategy is still committed to its bold approach, and introduced Bitcoin yield as a new performance metric to measure the ratio of Bitcoin holdings to outstanding shares. In October, the company also announced its ambitious “21/21 Plan,” to raise $42 billion through equity and debt to fund a three-year Bitcoin purchasing campaign.
Ripple and Coinbase Praise Trump’s SEC Chair Choice
Bitcoin could receive an extra price boost after crypto executives in the United States shared their support for President-elect Donald Trump’s nomination of Paul Atkins as the next chair of the SEC. Former SEC commissioner Atkins, who served under President George W. Bush from 2002 to 2008, is considered by many in the crypto industry as a very favorable choice, and could signal a shift away from the enforcement-heavy approach under current SEC Chair Gary Gensler.
Bitwise Asset Management general counsel Katherine Dowling called Atkins a “great choice” during a Bloomberg interview, and suggested that he could encourage better collaboration with lawmakers and other regulatory bodies like the Commodity Futures Trading Commission (CFTC). Ripple Labs CEO Brad Garlinghouse welcomed the prospect of Atkins leading the SEC, and stated it will bring "common sense" back to the agency.
Ripple has been at odds with the SEC since a 2020 lawsuit alleged the company used XRP as an unregistered security. Despite a recent $125 million judgment against Ripple, the case is still ongoing.
Coinbase Chief Legal Officer Paul Grewal also praised Atkins, and described his potential appointment as "sorely needed" for an agency that has faced criticism for its approach to regulating digital assets. Coinbase is also currently battling an SEC lawsuit over alleged unregistered securities.
Atkins has ties to the blockchain advocacy group Digital Chamber as well as crypto industry players, and previously suggested the SEC adopt a more accommodating stance toward digital assets to encourage industry growth in the U.S. If nominated, Atkins will require Senate confirmation, where the slim Republican majority could play a pivotal role in his approval.
