Trump stops short of establishing a bitcoin strategic reserve

NASHVILLE
—
Former
President

Donald
Trump
stopped
short
of
promising
to
establish
an
official
U.S.
bitcoin
strategic
reserve
currency
during
his
Saturday
keynote
speech
at
the
biggest


bitcoin

conference
of
the
year.

Instead,
the
Republican
presidential
nominee
pledged
simply
to
maintain
the
current
level
of

bitcoin
holdings
that
the
U.S.
has
amassed
from
seizing
assets
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,
United
States
of
America,
to
keep
100%
of
all
the
bitcoin
the
U.S.
government
currently
holds
or
acquires
into
the
future,”
he
said.

Trump’s
strategy
of
permanently
holding
your
bitcoin
stake,
through
both
bull
and
bear
markets,
is
strongly
encouraged
within
crypto
circles,
though
it
is
not
the
U.S.
government’s
present
approach.

Currently,
the U.S.
Marshals
Service
regularly
auctions
off bitcoin
as
well
as
other
cryptocurrencies
held
in
the
country’s
coffers
such
as


ether
and


litecoin.
These
sell-offs
can
sometimes
trigger
drops
in
crypto
prices, like
earlier
this
month when
Germany
began
to
liquidate
hundreds
of
millions
of
dollars
worth
of
bitcoin
it
had
seized.

In
a
closed-door
round
table
held
with
a
mix
of
donors
ahead
of
Trump’s
remarks
on
Saturday,
the
former
president
didn’t
talk
mechanics
of
his
plan,
but
he
did
say
he
thought
it
would
make
sense
for
the
government
to
hold
bitcoin.

The
gathering
included
investors
Tyler
and
Cameron
Winklevoss,
musician
Kid
Rock,
Republican
Senators
Cynthia
Lummis,
Bill
Hagerty
and
Marsha
Blackburn,
along
with
others,
according
to
two
people
who
were
in
the
room.

Trump’s
proposal
was
less
revolutionary
than
some
crypto
enthusiasts
had
expected,
and
it
failed
to
match
the
more
sweeping
pitch
of
third-party
presidential
candidate
Robert
F.
Kennedy
Jr.

“I
understand
that
tomorrow
President
Trump
may
announce
his
plan
to
build
a
bitcoin
Fort
Knox
and
authorize
the
U.S.
government
to
buy
a
million
bitcoin
as
a
strategic
reserve
asset,”
Kennedy
said
during
his
own
Bitcoin
Conference
speech
on
Friday.

Kennedy
went
further
than
Trump,
promising
to
establish
a
4
million
bitcoin
strategic
reserve
to
match
the
country’s
current
stake
in
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
purchase
550
bitcoin
a
day,
an
act
that
would
starkly
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
crypto
lobby
in
Washington,
Trump’s
reluctance
to
match
Kennedy’s
“bitcoin
Fort
Knox”
commitment
is
notable.

But
Trump’s
reservation
speaks
to
the
complications
of
promising
a
bitcoin
strategic
reserve
on
par
with
the
gold
standard.

The
Trump
campaign
did
not
immediately
respond
to
a
request
for
comment.

In
short,
no.

An
executive
order
would
not
be
enough
to
bring
a
U.S.
bitcoin
reserve
into
existence.
The
president
would
likely
need
new
legislation
and
congressional
approval
to
push
it
through.
Some
lawmakers
have
kicked
off
that
process.

Shortly
after
Trump’s
headline
speech
at
the
Bitcoin
Conference
on
Saturday,
Sen.
Lummis
of
Wyoming
announced
her
plan
to
introduce
new
legislation
that
would
support
a
strategic
bitcoin
reserve.

“Over
five
years,
the
United
States
will
assemble
1
million
bitcoin,
five
percent
of
the
world’s
supply,”
Lummis
said.
“And
that
will
be
held
for
a
minimum
of
20
years
and
can
be
used
for
one
purpose:
Reduce
our
debt.”

Lummis
added
that
establishing
this
kind
of
reserve
would
help
to
fortify
the
dollar
against
rising
inflation.

The
U.S.
government
has
an
accumulation
of
bitcoin
assets
that
it
hauls
in
from
financial
criminals
in
high-profile
sting
operations.

That
existing
bitcoin
stockpile
could
act
as
the
foundation
for
the
bitcoin
strategic
reserve,
which
the
U.S.
government
would
build
on
by
regularly
buying
a
certain
number
of
bitcoin.

Those
additional
bitcoin
purchases
would
likely
be
paid
for,
at
least
in
part,
by
U.S.
taxpayers.

Per
Sen.
Lummis’
proposed
legislation,
which
is
due
to
be
introduced
in
the
coming
days,
a
bitcoin
reserve
would
be
paid
for
with
“existing
funds”
of
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
the
initial
spending.

Passing
legislation
to
establish
a
reserve
like
the
one
Lummis
is
proposing
would
most
likely
require
a
Republican
sweep
in
November:
White
House,
Senate
and
House.

The
odds
of
this
kind
of
red
wave
appeared
to
be
rising
for
most
of
July,
as
Democrats
and
Independents
peeled
away
from
President
Joe
Biden.

But
with
Vice
President
Kamala
Harris
atop
the
Democratic
ticket,
election
2024
is
a
new
ball
game.

A
bitcoin
reserve
would
grant
the
digital
currency
an
even
greater
level
of
legitimacy,
building
upon
the
momentum
of
Wall
Street’s
growing
adoption
of
the
digital
asset.

In
January,
spot
bitcoin
exchange-traded
funds
went
live
on
U.S.
markets
for
the
first
time
ever
with
the
blessing
of
the
U.S.
Securities
and
Exchange
Commission.
Many
viewed
the
listing
as
an
event
that
cemented
bitcoin’s
place
as
an
asset
class
that
is
here
to
stay.

Still,
launching
a
national
reserve
would
be
a
stunning
promotion
for
the
adolescent
currency,
which
launched
in
2009
and
has
since
been
characterized
by
volatile
performance
with
occasional
windfalls
for
its
investors.
Trump
himself
was
a
naysayer
of
bitcoin
as
recently
as
2021
when
he
called
the
currency
“a
scam.”

In
the
short
term,
bitcoin’s
new
status
would
send
the
price
of
the
cryptocurrency
soaring.

“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,”
said


Marathon
Digital‘s
CEO
Fred
Thiel.
“That
then
drives
the
whole
price.”

For
now,
bitcoin
is
holding
steady
at
around
$68,000
as
markets
shrug
off
Trump’s
promises
on
bitcoin,
which
were
far
less
aggressive
than
anticipated.