Federal Reserve Chair Jerome Powell indicated that the institution is not interested in creating a national Bitcoin reserve. Following the announcement, Bitcoin struggled to maintain the $100,000 level.

On December 18, the Federal Reserve announced a 25 basis point reduction in the key interest rate, bringing it to 4.25–4.5% annually.

At the subsequent press conference, Neil Irwin from Axios asked Powell whether he saw “any value or benefit” in the government establishing a strategic reserve in Bitcoin.

“As you know, we are not allowed to own Bitcoin. The Federal Reserve Act defines what we can hold, and we are not seeking changes to that legislation. This is a decision for Congress, but we are not interested,” Powell replied.

Following the Federal Reserve meeting, Bitcoin’s price declined, dipping below the psychological $100,000 mark overnight on December 19. On Binance, the minimum price recorded was $98,802.

At the time of writing, Bitcoin’s price has recovered to around $101,000.

On December 12, in an interview with CNBC, President-elect Donald Trump reaffirmed his campaign proposal to create a national Bitcoin reserve, sparking speculation that he might sign an executive order to that effect immediately after his January 20 inauguration. Satoshi Action Fund CEO Dennis Porter outlined a mechanism that could allow the government to fund the initiative without requiring Congressional approval.

This optimistic outlook may have driven Bitcoin’s local rally to new highs above $108,000.

The idea of a Bitcoin reserve has garnered support at the state level but has also faced criticism.

Former BitMEX CEO Arthur Hayes expressed doubts about the Trump administration’s willingness to implement the initiative, predicting that its actual policies in January would disappoint investors and lead to a “painful crash” in cryptocurrency prices.

Real Vision Chief Analyst Jamie Coates also forecasted a correction in Bitcoin within the next two to three months.

Technical analyst Ali Martinez noted that Bitcoin’s price had broken out of a “Head and Shoulders” pattern. To invalidate the bearish outlook, Bitcoin needs to reclaim levels above $105,400, he said.

#Bitcoin $BTC appears to have broken out of a head-and-shoulders pattern, projecting a target of $99,000! #BTC must to break past $105,400 to invalidate the bearish thesis. pic.twitter.com/xpJZIaqRO9
— Ali (@ali_charts) December 18, 2024

Notably, the idea of creating Bitcoin reserves has also been discussed in the Russian State Duma and the European Parliament.