Bitcoin remained steady above the $104,500 mark on Thursday, trading at $104,749 despite growing concerns over rising U.S. debt levels and repeated cautions from prominent industry leaders.
Tesla CEO Elon Musk and Coinbase CEO Brian Armstrong both issued warnings about the potential impact of escalating government debt. Armstrong highlighted the possibility of bitcoin becoming a more critical player in the global financial system if U.S. voters fail to demand meaningful fiscal reform.
Echoing these concerns, Musk criticized the strain government debt places on national resources. He noted that interest payments already consume 25% of total government revenue, and if the deficit continues to increase, the majority of the budget could be dedicated to servicing interest alone.
Divergent Predictions for Bitcoin’s Near-Term Outlook
Market analysts are divided on bitcoin’s short-term trajectory. Some predict a dip below the $100,000 threshold, driven by geopolitical tensions and weakening technical signals. Such a decline could affect corporations that have increasingly amassed bitcoin reserves.
Currently, 51 publicly listed U.S. companies hold a combined total of 673,897 bitcoins, representing 3.2% of all bitcoins available. One notable example is Strategy, formerly MicroStrategy, which doubled its bitcoin holdings within two months, underscoring the growing corporate exposure to cryptocurrency.
New Bitcoin Whales Accumulate Holdings
Data reveals a surge in new bitcoin whales accumulating coins since January, with wallets now holding over 1.1 million bitcoins—up sharply from around 100,000 bitcoins a year ago. This compares to approximately 2.4 million bitcoins available on supervised trading platforms.
Role of Bitcoin ETFs in Market Dynamics
Experts suggest these new whales may be bitcoin exchange-traded funds (ETFs), which began trading on U.S. exchanges last year. These ETFs have attracted over $44 billion in net investments, equating to more than 500,000 bitcoins purchased in the past 12 months.
Notably, the BlackRock IBIT fund holds 660,000 bitcoins, while the Fidelity fund owns nearly 200,000. This institutional accumulation has tightened bitcoin supply on the market, reducing available units to under 2.8 million by December when prices crossed $100,000, and further down to 2.4 million recently.
