Morgan Stanley has stated that Bitcoin now possesses sufficient market capitalization to be considered a U.S. government reserve asset.
However, the financial institution cautioned that Bitcoin’s volatility remains significantly higher than that of other traditional reserve currencies.
Notably, Bitcoin’s market capitalization stands at $1.87 trillion. Morgan Stanley estimated that a $370 billion allocation to Bitcoin would mirror its global market capitalization weight. The report also suggested that a U.S. reserve holding between 12% and 17% of the total Bitcoin supply would be consistent with how other reserve currencies are proportioned.
The findings arrive as the Trump administration advances plans for a Strategic Bitcoin Reserve. In March, an executive order directed the formation of a federal entity to custody Bitcoin assets, drawing comparisons to Fort Knox.
Bitcoin advocate Troy Cross noted that although current volatility may disqualify Bitcoin from formal reserve status, its declining trend suggests potential. He added that once Bitcoin stabilizes below volatility thresholds, its adoption as a reserve could accelerate sharply.
Ultimately, they suggest bitcoin is too volatile to play a reserve role now… although there’s a paradox here. Volatility is decreasing (see their chart) and the moment its volatility gets low enough to meet their standards, its potential as reserve currency will spike price. pic.twitter.com/oqnrPmMKaL
— Troy Cross (@thetrocro) May 6, 2025
Bitcoin Strategic Reserve Bill Faces Opposition
Despite support from crypto advocates, the proposed reserve plan has faced resistance from some financial leaders. In a public debate, Kevin O’Leary dismissed the initiative, asserting that the Strategic Bitcoin Reserve Bill would not pass in Congress.
He criticized the bill’s champion, Michael Saylor, alleging that his company’s Bitcoin accumulation strategy is motivated by self-interest. O’Leary argued that Saylor’s firm raises capital through share and debt sales to fund Bitcoin purchases, creating a valuation model he claims lacks long-term sustainability.
Meanwhile, proponents like Anthony Scaramucci argue that the Bitcoin reserve measure would position the U.S. at the forefront of digital asset integration and help address the U.S. national debt.
UK and Switzerland Reject National Bitcoin Reserves
International response to Bitcoin reserve proposals has also remained cautious. The United Kingdom has ruled out holding Bitcoin as a reserve asset. Economic Secretary to the Treasury Emma Reynolds confirmed the decision during her remarks at the FT Digital Asset Summit. She emphasized that the UK would instead focus on regulation and the use of blockchain in public finance systems.
Meanwhile, the Swiss National Bank (SNB) has echoed similar concerns. At the institution’s General Assembly, SNB President Martin Schlegel stated that cryptocurrency market liquidity and volatility continue to present risks for long-term value preservation.
He noted that even seemingly stable digital markets can quickly lose liquidity during crises, disqualifying them from consideration as reserve-grade assets.
