Donald Trump's administration is expected to foster a more favorable climate for cryptocurrencies, highlighted by the potential enactment of the Bitcoin Act according to research from CoinShares.

"This proposal would establish bitcoin as a strategic reserve asset, with the U.S. government acquiring up to 5% of bitcoin's total supply," said James Butterfill, head of research at CoinShares. Translation: This proposal establishes bitcoin as a key asset, allowing the U.S. government to purchase a significant amount of bitcoin.

The report indicates that such legislation could grant Bitcoin a status akin to gold and attract considerable governmental and institutional interest in the cryptocurrency.

In July, Senator Cynthia Lummis introduced legislation entitled the Boosting Innovation, Technology and Competitiveness Through Optimized Investment Nationwide (BITCOIN) Act, aimed at establishing a strategic bitcoin reserve. This initiative could potentially help alleviate the national debt by acquiring one million bitcoins over five years.

With Trump's promises of a bitcoin reserve and Lummis’ advocacy, the legislation's implementation may stimulate substantial growth and value for bitcoin.

CoinShares also noted Trump's prior criticism of the SEC's policies on cryptocurrency, anticipating a shift towards a more crypto-friendly regulatory environment following new appointments at the SEC, which could greatly benefit the industry.