Trump's Bitcoin Strategy: A National Crypto Treasure?

Bitcoin prices have gained momentum this year, not least due to the crypto-friendly announcements from President-elect Donald Trump. In an inaugural address, Trump spoke of considering the U.S.'s Bitcoin holdings as a "permanent national asset" intended to benefit all Americans. The goal? To catapult the United States to the forefront of the global cryptocurrency landscape. The U.S. already has Bitcoin worth nearly 20 billion dollars, obtained through legal seizures, according to crypto-tracking firm Arkham Intelligence. Trump opines that these holdings should no longer be sold in the future in order to build a "core reserve" of Bitcoin, thereby stabilizing prices. However, some voices are calling for more than merely holding the current cryptocurrency stock. They propose a strategic Bitcoin reserve, similar to the government's gold and oil reserves. Republican Senator Cynthia Lummis from Wyoming has even introduced a bill providing for the acquisition of 1 million Bitcoin—around 5% of the tokens in circulation. While Trump is convinced a Bitcoin reserve would help the United States strengthen its role in global competition, there are also critical voices. Some experts believe that clear regulations for digital assets should be a priority. Owen Lau of Oppenheimer & Co. considers the creation of a strategic reserve to be risky and difficult to justify. According to a Barclays analysis, financing such a reserve could also require the issuance of new government debt, which is likely to meet with tough resistance. Fed Chairman Jerome Powell recently spoke out against the Federal Reserve holding Bitcoin, emphasizing the legal restrictions that prohibit the Fed from holding such assets.