Bitcoin Price Surges as Speculation Emerges Over Potential US Seizure of Venezuelan Crypto Reserves

By Omkar Godbole (All times ET unless indicated otherwise) The new year has begun on a positive note for cryptocurrency, with Bitcoin currently trading near $92,700, representing a 1.3% increase over the past 24 hours and a 5% gain since the start of the year. Major alternative cryptocurrencies such as XRP, SOL, BNB, and ETH have also experienced gains, ranging from 1% to 3% over the past day. Specifically, XRP has risen by 2.49%, SOL by 1.27%, BNB by 0.54%, and ETH by 0.99%. The CoinDesk 20 Index (CD20) has increased by 1.25%, reflecting the strength of the most prominent and active assets, whereas the CoinDesk 80 Index (CD80) has lost its initial gains, indicating relative weakness in the broader alternative cryptocurrency market. According to analysts, the recent price increase of Bitcoin can be attributed to safe-haven demand following the US action in Venezuela and the exhaustion of tax-related selling. Deribit data reveals renewed demand from traders for bullish option bets, with a focus on the $100,000 strike call. Laser Digital informed CoinDesk via email that "we observed ETF inflows on January 2nd, following consecutive outflows in December, and the execution of 3000x lots of January-end BTC calls on the last day of December." Over the weekend, the US launched an attack on Venezuela, resulting in the capture of President Nicolás Maduro. This has sparked speculation on social media that Venezuela may be in control of a shadow Bitcoin reserve worth over $60 billion, potentially comparable to that of the Bitcoin treasury company MicroStrategy (MSTR), which holds BTC valued at over $62 billion. However, these claims remain unverified. If true, the US might seize these coins and add them to its strategic Bitcoin reserve. QCP Capital stated in a market note on Monday that "the possibility of the US adding any seized BTC to its strategic reserve reduces the likelihood of forced selling and highlights BTC's growing strategic importance as nations compete to accumulate." Another trending narrative suggests that President Donald Trump may soon tap into Venezuela's 300 billion barrels of oil reserves, leading to an increase in supply. This, in turn, could result in a decrease in oil prices, allowing the Federal Reserve to cut interest rates more rapidly. However, it is essential to note that having reserves and producing them are two distinct things. Several analysts have pointed out that Venezuelan crude from the Orinoco Belt is heavy, impure sour crude, making it challenging and expensive to extract and refine, requiring significant investments. As a result, the reserves may not be available for immediate use, limiting their impact on oil prices. In other words, the disinflationary impulse anticipated by Bitcoin bulls may not materialize in the near future. In other key news, Ethereum co-founder Vitalik Buterin announced that the network has effectively solved the blockchain scalability trilemma, achieving a balance between decentralization, security, and high transaction speed, thanks to key upgrades such as zkEVMs and PeerDAS. In traditional markets, the dollar index has risen for the fourth consecutive trading day, surpassing 98.50. Futures tied to the S&P 500 and Nasdaq 100 have traded higher. This week, the macroeconomy will see a series of key US data releases, starting with the ISM Manufacturing PMI later today, followed by the non-manufacturing PMI, the ADP Employment report, and nonfarm payrolls data in the days ahead. Stay alert! Read more: For analysis of today's activity in altcoins and derivatives, see Crypto Markets Today What to Watch Token Events Conferences Market Movements Bitcoin Stats Technical Analysis Crypto Equities Crypto Treasury Companies ETF Flows Spot BTC ETFs Spot ETH ETFs Source: Farside Investors While You Were Sleeping