Republican presidential candidate and former U.S. President Donald Trump speaks during a campaign rally in Charlotte, North Carolina, on July 24, 2024.
Marco Bello | Reuters
NASHVILLE — Former President Donald Trump stopped short of promising to establish an official U.S. bitcoin strategic reserve currency when he delivered a keynote address at a major event Saturday. Bitcoin meeting Of the year.
Instead, the Republican presidential candidate pledged to maintain the current level of Bitcoin holdings the U.S. has amassed by seizing assets from financial criminals.
“For too long, our government has violated the most important rule that every Bitcoiner knows by heart: Never sell your Bitcoin,” Trump said at a Bitcoin conference in Nashville this year.
He said, “If I am elected, my administration’s policy will be that the United States government will retain 100% of all bitcoin currently owned or acquired in the future.”
President Trump’s strategy of permanently holding Bitcoin during both bull and bear markets is highly recommended in the cryptocurrency industry., But this is not the U.S. government’s current approach.
The U.S. Marshals Service currently regularly auctions off Bitcoin and other cryptocurrencies stored in national vaults. ether and Litecoin. Such sell-offs can sometimes trigger a drop in cryptocurrency prices, as happened earlier this month when Germany began liquidating hundreds of millions of dollars worth of seized bitcoin.
At a private roundtable with donors ahead of Trump’s speech on Saturday, the former president gave no specifics on his plans but said he thinks it makes sense for the government to own bitcoin.
According to two people in the room, the meeting was attended by investors Tyler and Cameron Winklevoss, musician Kid Rock, and Republican senators Cynthia Lummis, Bill Hagerty and Marsha Blackburn.
Trump’s proposal was less groundbreaking than some cryptocurrency advocates had anticipated, and fell short of the broader argument of third-party presidential candidate Robert F. Kennedy Jr.
“I know that tomorrow, President Trump is likely to announce a plan to build a Bitcoin Fort Knox and authorize the U.S. government to purchase 1 million Bitcoins as a strategic reserve asset,” Kennedy said in a speech at a Bitcoin conference on Friday.
Kennedy went further than Trump, promising to establish a strategic reserve of 4 million bitcoins, equivalent to the current U.S. gold holdings, some of which are stored 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 a day, a move that would completely change how cryptocurrencies are regulated and valued.
As the influence of the cryptocurrency lobby in Washington grows, Bitcoin has emerged as a key campaign issue, and it is notable that Trump has been reluctant to join Kennedy’s “Bitcoin Fort Knox” pledge.
But President Trump’s concerns highlight the complexities of committing to a Bitcoin strategic reserve on par with the gold standard.
The Trump campaign did not immediately respond to a request for comment.
Could the President Launch a Bitcoin Reserve Fund on His Own?
Simply put, no.
An executive order alone won’t be enough to make a U.S. Bitcoin reserve a reality. The president would need new legislation and congressional approval to move forward. Some lawmakers have begun the process.
Shortly after Trump’s major speech at a Bitcoin conference on Saturday, Wyoming Senator Lummis announced plans to introduce new legislation to support a strategic Bitcoin reserve.
“Over five years, the United States will assemble 1 million bitcoins, which is 5% of the world supply,” Loomis said. “And those are held for at least 20 years and can be used for one purpose: reducing debt.”
Loomis added that establishing these kinds of reserves would help strengthen the dollar against rising inflation.
How will the US fund its Bitcoin reserves?
The U.S. government has been amassing Bitcoin assets seized from financial criminals through notorious fraud investigations.
The existing Bitcoin inventory could form the basis of a Bitcoin strategic reserve, from which the U.S. government could periodically purchase a certain amount of Bitcoin.
The additional cost of Bitcoin purchases will likely be paid at least in part by U.S. taxpayers.
Under the bill proposed by Senator Lummis, the Bitcoin reserve fund, which is expected to be introduced in the coming days, would be paid for with Treasury’s “existing funds,” including tax revenues.
The ultimate goal, Loomis said at the Bitcoin conference, is to reduce the federal deficit, which would offset the initial spending.
To pass legislation establishing a sanctuary like the one Loomis proposes, Republicans would most likely need to sweep the White House, the Senate and the House in November.
The odds of this kind of red wave appear to have increased throughout July as Democrats and independents have turned away from President Joe Biden.
But the 2024 election takes on a new twist with Vice President Kamala Harris being mentioned as a possible Democratic nominee.
What will happen to Bitcoin?
Bitcoin reserves would lend a greater level of legitimacy to the digital currency, fueled by the growing adoption of digital assets on Wall Street.
Still, launching a national reserve would be a stunning publicity stunt for the youth currency that was launched in 2009. Since then, it has been characterized by volatile performance, with investors occasionally receiving unexpected gains. Trump himself has been negative about Bitcoin, calling it a “fraud” in 2021.
In the short term, Bitcoin’s new status will likely lead to a surge in cryptocurrency prices.
“If the U.S. government builds a strategic reserve, other countries are likely to do the same, and that will take a lot of bitcoin out of the market,” he said. Marathon Digital‘s CEO Fred Thiel. “That determines the overall price.”
Currently, Bitcoin is holding steady at around $68,000, ignoring President Trump’s much less aggressive Bitcoin pledge than expected.
