Trump Could Put a Halt to the Establishment of Bitcoin Reserve
The 45th President of the United States, Donald Trump, stated in his speech on Saturday at the biggest Bitcoin conference that he refrained from guaranteeing the establishment of an official US Bitcoin reserve.
Rather than increasing the reserve, Trump pledged to maintain the Bitcoin reserve at the current level, which the US has accumulated from financial criminals.
“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, it will be the policy of my administration to keep 100% of all the bitcoin the U.S. government currently holds or acquires in the future,” he added.
Crypto circles generally support Donald Trump’s permanent holding of Bitcoin, regardless of market conditions. This, however, is not the approach currently assumed by the United States government. The US Marshals Service currently auctions off Bitcoin and other cryptocurrencies, including Ether and Litecoin, held in the country’s coffers. These sell-offs can sometimes drive crypto prices down, as occurred earlier this month when Germany began liquidating hundreds of millions of dollars’ worth of Bitcoin it had seized.
During a closed-door roundtable with donors before his Saturday remarks, Trump did not discuss the specifics of his plan but indicated that, according to him, it would make sense for the government to hold Bitcoin.
Will Trump Launch the Bitcoin Reserve?
In one executive order, Trump will not be able to launch the Bitcoin reserve unilaterally. A US President would need approval from new legislation and Congress.
The US government has amassed a sizeable supply of Bitcoin from several high-profile busts of financial crimes and this current stash can act as the base for the proposed Bitcoin strategic reserve, which the government would further enhance by regularly purchasing additional Bitcoin.
At least in part, these additional Bitcoin purchases would likely be underwritten by the US taxpayer. The reserve would be funded using “existing funds” in the Treasury Department, which includes tax revenue, according to a proposal from Senator Lummis expected to be forthcoming. This reserve would be aimed at shaving some of the federal deficit, potentially even offsetting the initial spending. Such legislation would need to pass in the case of a Republican sweep in the White House, Senate, and House in the upcoming election.
What Does the Future of Bitcoin Hold?
For digital currency to gain a better level of legitimacy, a Bitcoin reserve is pretty much considered a pillar and the reserve would build upon the force of Wall Street’s adoption growth of the digital asset.
In January, Bitcoin ETFs began trading on US markets for the first time and were approved by the Securities and Exchange Commission (SEC) and had immense potential implications for Bitcoin.
Many consider this a huge indicator that Bitcoin has finally emerged as a valid form of investment.
The godfather of cryptocurrencies made its inception in the market in 2009 and has since seen many peaks and troughs but never stopped growing. The thought of creating a national reserve for Bitcoin would serve as the greatest promotion for the currency. Bitcoin is a very volatile currency, sometimes surging or falling with great speed. Nevertheless, it has also turned some investors into multimillionaires.
Former President Donald Trump as recently as 2021 bashed Bitcoin, calling it a “scam,” indicating that even with the gradual acceptance being achieved by Bitcoin, it still has its critics. During this short period, Bitcoin’s value has soared.
“If the U.S. government built a strategic reserve, then likely other countries would, and that would pull a whole bunch of Bitcoin out of the market,” stated Marathon Digital’s CEO Fred Thiel, “that then drives the whole price.”
As of now, the value of Bitcoin has been steady at $68,000 as the markets dismiss Trump’s words and promises for Bitcoin.
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