Republican presidential candidate and former U.S. President Trump delivers a speech during a campaign event in Charlotte, North Carolina, on July 24, 2024.
Marco Bello | Reuters
NASHVILLE — Former President Donald Trump stopped short of committing to establishing an official U.S. strategic reserve currency in Bitcoin during his biggest keynote speech on Saturday. Bitcoin Meeting This year’s.
Instead, the Republican presidential candidate simply pledged to maintain current levels of Bitcoin holdings accumulated by the United States through the seizure of assets from financial criminals.
“For too long, our government has violated a cardinal rule that every Bitcoin enthusiast knows well: Never sell your Bitcoins,” Trump said at this year’s Bitcoin conference in Nashville.
“If I are elected, it will be the policy of my U.S. government to retain 100% of all Bitcoin currently held by the U.S. government or acquired in the future,” he said.
Trump’s strategy of permanently holding Bitcoin shares in bull and bear markets is strongly encouraged in crypto circles, Although this is not the current approach of the US government.
Currently, the U.S. Marshals Service regularly auctions Bitcoin as well as other cryptocurrencies held in the treasury, such as ether and Litecoin. These sell-offs sometimes trigger declines in cryptocurrency prices, such as earlier this month when Germany began liquidating hundreds of millions of dollars worth of Bitcoin it had seized.
In a closed roundtable with multiple donors ahead of Trump’s speech on Saturday, the former president did not talk about the specifics of his plan, but he did say he believed there was a case for government holdings of Bitcoin. meaningful.
Attendees at the party included investors Tyler and Cameron Winklevoss, musician Kid Rock, Republican Sens. Cynthia Loomis and Bill Hagerty, according to two people in the room. and Marsha Blackburn and others.
Trump’s proposal is not as revolutionary as some cryptocurrency enthusiasts expected, and it fails to match the broader pitch of third-party presidential candidate Robert F. Kennedy Jr.
Kennedy said in a speech at the Bitcoin Conference on Friday: “As far as I know, President Trump may announce plans to build Bitcoin Fort Knox tomorrow and authorize the US government to purchase 1 million Bitcoins as strategic reserve assets.”
Kennedy went further than Trump, pledging to create a strategic reserve of 4 million Bitcoins to match the country’s current gold reserves, some of which is stored near the Fort Knox military base. The independent presidential candidate said he would sign an executive order directing the U.S. Treasury Department to purchase 550 Bitcoins per day, an act that would revolutionize how cryptocurrencies are regulated and valued.
As Bitcoin becomes a more central issue in the campaign, in large part due to the growing cryptocurrency lobby in Washington, Trump’s reluctance to fulfill Kennedy’s “Bitcoin Fort Knox” promise is notable.
But Trump’s reservations illustrate the complexities of committing to a strategic reserve of Bitcoin equivalent to the gold standard.
The Trump campaign did not immediately respond to a request for comment.
Can the President unilaterally activate a Bitcoin reserve?
In short, no.
An executive order is not enough for the United States to build a Bitcoin reserve. The president will likely need new legislation and congressional approval to push it through. Some lawmakers have already started the process.
Shortly after Trump gave a headline speech at a Bitcoin conference on Saturday, Wyoming Senator Lummis announced plans to introduce new legislation to support strategic Bitcoin reserves.
“Within five years, the United States will produce 1 million Bitcoins, accounting for 5% of the global supply,” Lummis said. “This funding will be held for at least 20 years and can be used for one purpose: reducing our debt.”
Loomis added that building such reserves would help strengthen the dollar’s ability to withstand rising inflation.
How will the United States fund Bitcoin reserves?
The U.S. government has amassed vast amounts of Bitcoin assets that were obtained from financial criminals through high-profile sting operations.
The existing Bitcoin inventory can serve as the basis for the Bitcoin Strategic Reserve, which the U.S. government will establish by regularly purchasing a certain amount of Bitcoin.
These additional Bitcoin purchases are likely to be paid for, at least in part, by U.S. taxpayers.
Under legislation proposed by Senator Lummis, which is due to be introduced in the coming days, the Bitcoin reserve would be funded by “existing funds” from the Treasury, including tax revenues.
Loomis told the Bitcoin conference that the ultimate goal is to reduce the federal deficit, which could offset the initial spending.
Passing legislation to create the reserve, like the one proposed by Lummis, would likely require Republicans to sweep the White House, Senate and House of Representatives in November.
The likelihood of such a red wave appeared to be rising for much of July as Democrats and independents turned away from President Joe Biden.
But with Vice President Kamala Harris at the top of the Democratic ticket, the 2024 election will be a new game.
What will happen to Bitcoin?
The Bitcoin reserve would give the digital currency a higher level of legitimacy, building on Wall Street’s growing adoption of digital assets.
Still, the launch of the national reserve would be a stunning boost for the teenage currency, which was launched in 2009 and has since been characterized by erratic performance and occasional windfalls for investors. As recently as 2021, Trump himself was an opponent of Bitcoin, calling the currency “a scam.”
In the short term, Bitcoin’s new status will cause the cryptocurrency’s price to surge.
“If the U.S. government builds a strategic reserve, other countries may do the same, which will take a lot of Bitcoin out of the market,” he said. marathon numbersCEO Fred Thiel. “That’s going to drive the whole price up.”
Currently, Bitcoin is holding steady around $68,000 as the market shrugs off Trump’s commitment to Bitcoin, which was far less aggressive than expected.
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