As Bitcoin hits new all-time highs before Trump takes office, his bold promise to hold all U.S. government-owned Bitcoin stirs enthusiasm and skepticism. Meanwhile, Senator Lummis is pushing for a national Bitcoin reserve. Critics are cautiously optimistic about a prosperous bull run.
WASHINGTON, DC – Sen. Cynthia Lummis (R-WY) (Photo by Drew Angerer/Getty Images)
Trump Promises Strategic Bitcoin Reserve
President Donald Trump made headlines at the July 2024 Bitcoin Conference in Nashville by making big promises to the bitcoin community.
During his keynote, Trump vowed that, if re-elected, the United States would retain “100% of the bitcoins the US government currently holds or acquires in the future.”
His statement has sparked discussions around the government’s potential role in cryptocurrency markets and raised questions about how such a policy would work in practice.
The Game Plan: Sen. Lummis Unveils BITCOIN Act for U.S. Reserve
At the same conference, Senator Cynthia Lummis, a Republican from Wyoming and a prominent supporter of bitcoin, unveiled the BITCOIN Act. The proposed legislation advocates for creating a U.S. strategic bitcoin reserve aimed at strengthening the national economy and addressing the growing national debt.
Lummis’s bill presents bitcoin as an asset with the potential to serve as a reserve similar to gold, positioning the U.S. as a global leader in financial innovation. Furthermore, the BITCOIN Act emphasizes personal financial autonomy by protecting individuals’ rights to self-custody their bitcoin, a core tenet of the cryptocurrency ethos.
Trump’s Promise to Retain Bitcoin as a Government-Held Reserve Asset Faces Feasibility Challenges
Bitcoin can only be acquired through three methods: mining, purchasing, or seizure.
Currently, the U.S. government holds a substantial amount of bitcoin, believed to have been acquired primarily through seizures linked to criminal cases.
Agencies like the FBI, IRS, and Secret Service frequently seize bitcoin and other digital assets as part of criminal investigations. Yet, only the U.S. Marshals Service has the authority to sell these assets. The Department of Justice posts infrequent updates online, making it difficult to estimate the government’s real-time bitcoin holdings.
Trump’s vague pledges about cryptocurrencies leave some wondering if he has considered the complexities of bitcoin acquisition and custody. Backers of the plan are banking on Trump following Lummis’ BITCOIN plan.
Space for Skepticism
Trump’s recently launched decentralized finance project, ‘World Liberty Financial’ places the spotlight on his commitment to bitcoin. This venture, built on a alternative layer-one blockchain has raised concerns among Bitcoin advocates who question his commitment to his original promises made to the Bitcoin community.
Markets Signal Increasing Optimism in Crypto
“Bitcoin could become the next strategic reserve asset,” says Barbara Goodstein, Managing Partner at R360, echoing the view of those who see bitcoin as a potential safeguard against inflation and a means of protecting U.S. economic interests. Establishing a Bitcoin reserve, per advocates, could advance the U.S. in financial strategy and digital sovereignty.
The Rising Influence of Digital Assets in U.S. Policy
For now, Trump’s promise to “hold onto” government bitcoin holdings serves as a signal to capital markets that bitcoin is the asset to watch.
Whether or not bitcoin becomes a U.S. strategic reserve, the discussion has spotlighted digital assets as increasingly relevant to U.S. economic interests. As cryptocurrencies like bitcoin continue to mature, their role in government policy will likely persist, shaping the future of digital asset discussions in the United States and globally.
