Speculation has been growing that the former President will announce plans to establish a bitcoin strategic reserve during his speech on Saturday at the 2024 Bitcoin Conference.
Republican presidential candidate Donald Trump will be speaking at the 2024 Bitcoin Conference on Saturday.
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Posted July 26, 2024 at 12:16 pm EST.
Nashville, Tenn—Former President and current GOP candidate Donald Trump is slated to speak at the 2024 Bitcoin Conference on Saturday afternoon, and rumors are swirling about what crypto policies he might propose.
What has been speculated about the most is whether he will announce that, if elected, he planned to create a bitcoin strategic reserve in the U.S. (As of now, predictions market Polymarket has the odds of Trump making such an announcement by the end of July at 28%).
But what exactly does this idea mean?
The U.S. does not currently have a strategic reserve, as the U.S. dollar is not backed by anything other than a liability on the Federal Reserve’s balance sheet. The only strategic reserve the U.S. has is the Strategic Petroleum Reserve (SPR), which contains the world’s largest supply of emergency crude oil to protect against oil import tariffs. The 1944 Bretton Woods Agreement established the U.S. dollar as the world’s dominant reserve currency, and also that the dollar would be convertible to gold at a fixed exchange rate. However, In 1971, President Nixon terminated the convertibility of the U.S. dollar to gold.
Establishing bitcoin as a strategic reserve could simply be a plan to hold a certain amount of bitcoin to support U.S. foreign policy, similar to the SPR, or possibly to back the U.S. dollar with bitcoin in order to help stabilize the dollar’s value. The U.S. already is the world’s largest nation-state holder of bitcoin with around 210,000 bitcoins, primarily from the Department of Justice’s seizures from illicit actors.
An X post last week by Dennis Porter, the CEO of the Satoshi Action Fund, that, according to Porter’s sources, Trump was planning to announce a U.S. bitcoin reserve at the Bitcoin Conference in Nashville, spurred increasing speculation about Trump’s plans.
https://x.com/Dennis_Porter_/status/1813949707368149329
Another possibility suggested by Fox News is that pro-crypto Senator Cynthia Lummis (R-Wyo.), who is speaking at a fireside chat at the conference on Friday afternoon and then is giving a speech there on Saturday, will reveal that she is introducing a bill in the Senate to make bitcoin a strategic reserve asset. This would be a legislative measure that would have to be approved by Congress and then the President, whereas if Trump became president, he that would create a similar effect to a president announcing bitcoin as a strategic reserve through an Executive Order.
Potential Impact on Bitcoin Prices
Troy Cross, a professor at Reed College and a well-known expert on bitcoin mining, said he doesn’t expect Trump to offer much detail on the proposed bitcoin strategic reserve plan. “I think he [Trump] will mention it without a concrete and quantified plan. [And] I don’t think the price will move…think Elon on SNL,” Cross said.
In 2021, the news that Elon Musk, a fervent supporter of Dogecoin, was going to host Saturday Night Live gave a boost to the price of the memecoin, but after his actual appearance, DOGE’s price tumbled.
“A bitcoin reserve would certainly be a strategic move for the U.S. — ensuring that our country has a hedge to stay on top regardless of shifts in the global monetary order,” said David Zell, co-executive Director of the Bitcoin Policy Institute, a non-profit think tank. (Disclosure: the author is a policy advisor to the Institute).
“The price may move a bit on an announcement but the market will price in uncertainty until a) [the] election, b) more clear evidence of execution, c) info on the exact scale and scope and sustainability of the policy, and d) the international response and follow-on behavior,” Zell added.
However, some have expressed concern that if Trump does announce a bitcoin strategic reserve, he might be choosing the wrong issue to address in an important forum before the largest bitcoin conference in the world.
Chester Nay, IT Director at environmental consultant ALL4 who is attending the conference, said that more meaningful issues might be the environmental impact of bitcoin mining, as well as the right to self-custody bitcoin, crypto property rights, and the ability of bitcoin miners to operate in the U.S. Trump has already held a roundtable with major bitcoin mining companies at Mar-A-Lago in early June.
Whatever else Trump might announce on Saturday remains unclear, but it is unlikely the former president would miss an opportunity to reveal some kind of major initiative that would garner attention at the crypto conference.
