Bitcoin
Trump stops short of establishing a strategic bitcoin reserve
Donald Trump during his speech at the 2024 Bitcoin Conference in Nashville, Tennessee.
The Washington Post | The Washington Post | Getty Images
“For too long our government has violated the cardinal rule that every bitcoiner knows by heart: Never sell your bitcoin,” Trump said at this year’s Bitcoin Conference in Nashville.
“If I am elected, the policy of my administration, the United States of America, will be to hold 100% of all bitcoins that the U.S. government currently holds or acquires in the future,” he said.
Trump’s strategy of permanently holding onto his bitcoin holdings, through both bull and bear markets, is strongly encouraged in cryptocurrency circles., although this is not the current approach of the US government.
Currently, the The US Marshals Service conducts regular auctions bitcoin, as well as other cryptocurrencies held in the country’s coffers, such as ether It is litecoin. These liquidations can sometimes trigger drops in cryptocurrency prices, like at the beginning of this month when Germany began liquidating hundreds of millions of dollars worth of bitcoins it had seized.
In a closed-door roundtable discussion held with a mix of donors ahead of Trump’s remarks on Saturday, the former president did not elaborate on the mechanics of his plan but said he thought it would make sense for the government to hold bitcoin.
The meeting included investors Tyler and Cameron Winklevoss, musician Kid Rock, Republican Sens. Cynthia Lummis, Bill Hagerty and Marsha Blackburn, among others, according to two people who were in the room.
Trump’s proposal was less revolutionary than some cryptocurrency enthusiasts had hoped and failed to match the more sweeping rhetoric of third-party presidential candidate Robert F. Kennedy Jr.
“I understand that tomorrow President Trump may announce his plan to build a Fort Knox of bitcoin and authorize the U.S. government to purchase one million bitcoins as a strategic reserve asset,” Kennedy said during his own speech at the Bitcoin Conference on Friday.
Kennedy went further than Trump, promising to establish a strategic reserve of 4 million bitcoins to match the country’s current holdings of gold, some of which is held near the military base at Fort Knox. The independent presidential candidate said he would sign an executive order directing the U.S. Treasury to buy 550 bitcoins per day, a move that would dramatically alter how the cryptocurrency is regulated and valued.
As bitcoin becomes a more central issue on the campaign trail, spurred in large part by the growing presence of the cryptocurrency lobby in Washington, Trump’s reluctance to match Kennedy’s commitment to “Bitcoin’s Fort Knox” is notable.
But Trump’s reservation speaks to the complications of promising a strategic reserve of bitcoin equivalent to the gold standard.
The Trump campaign did not immediately respond to a request for comment.
In short, no.
An executive order wouldn’t be enough to bring a U.S. bitcoin reserve into existence. The president would likely need new legislation and congressional approval to enact it. Some lawmakers have begun that process.
Shortly after Trump’s keynote address at the Bitcoin Conference on Saturday, Wyoming Senator Lummis announced her plan to introduce new legislation that would support a strategic bitcoin reserve.
“Over the course of five years, the United States will gather 1 million bitcoins, five percent of the world’s supply,” Lummis said. “And this will be held for a minimum of 20 years and can be used for one purpose: to reduce our debt.”
Lummis added that establishing such a reserve would help strengthen the dollar against rising inflation.
The US government has a hoard of bitcoin assets that it obtains from financial criminals in high-profile operations.
This existing stock of bitcoins could serve as the basis for a strategic bitcoin reserve, which the US government would develop by regularly purchasing a certain amount of bitcoins.
These additional bitcoin purchases would likely be paid for, at least in part, by US taxpayers.
Under Senator Lummis’ proposed legislation, which is expected to be introduced in the coming days, a bitcoin reserve would be paid for with “existing funds” from the Treasury Department, which includes tax revenue.
The ultimate goal would be to reduce the federal deficit, Lummis said at the Bitcoin Conference, which could potentially offset initial spending.
Passing legislation to establish a set-aside like the one Lummis is proposing would likely require a landslide Republican victory in November: the White House, Senate and House.
The chances of that kind of red wave appeared to be rising through most of July as Democrats and independents shifted away from President Joe Biden.
But with Vice President Kamala Harris at the top of the Democratic ticket, the 2024 election is a new ballgame.
A bitcoin reserve would grant the digital currency an even greater level of legitimacy, building on the momentum of Wall Street’s growing adoption of the digital asset.
In JanuarySpot bitcoin exchange-traded funds went live on U.S. markets for the first time with the blessing of the U.S. Securities and Exchange Commission. Many saw the listing as an event that cemented bitcoin’s place as an asset class that was here to stay.
Still, launching a national reserve would be an impressive boost for the teen-dollar currency, which launched in 2009 and has since been characterized by volatile performance with occasional windfalls for its investors. Trump himself was a vocal opponent of bitcoin in 2021, when he called the currency “a scam.”
In the short term, bitcoin’s new status would cause the cryptocurrency’s price to skyrocket.
“If the US government were to build a strategic reserve, other countries would probably follow suit, and that would take a lot of bitcoins off the market,” he said. Digital MarathonCEO Fred Thiel. “That then determines the total price.”
For now, bitcoin is holding steady around $68,000 as markets shrug off Trump’s promises on bitcoin, which have been far less aggressive than anticipated.