Diversification is on the table as the U.S. prepares for a potential strategic stockpile of crypto
In the aftermath of the long-awaited executive order on crypto policy and investments that was issued by the Trump administration one aspect of the order caused mixed feelings amongst the crypto community. In a single statement, referring to the coming research into establishing a digital asset stockpile, the much anticipated executive order created a dividing line in the crypto community. On one side of the divide are the bitcoin maximalists, who have consistently advocated that the only cryptoasset worthy of consideration, investment, or attention is bitcoin, excluding all others. The opposing perspective in this instance are the members of the crypto community who argue that while bitcoin certainly is a leading, dominant, and robust cryptoasset, other crypto are worth including in any federal or state level fund.
Instead of repeating the same arguments and debates that have been occurring for years, both on social media and in-person, it seems a better use of time to examine why a diversified federal digital asset stockpile makes sense from a strategic and policy perspective. While it is early days in this discussion, and efforts are being led by Senator Lummis and others to legislatively establish a strategic bitcoin reserve, the fact remains that diversification remains on the table.
Stockpile Formation Must Be Strategic
As much as the bitcoin maximalist community might want any strategic reserve or stockpile to focus exclusively on bitcoin the reality is that any such decision by the U.S. must be made in a measured and strategic way. Simply announcing that the U.S. will be actively buying bitcoin immediately would send shockwaves through the market, increase volatility in crypto and other financial assets, and be sure to cause political and socio-economic ramifications. In short, why should the U.S. federal government pick bitcoin as the singular winner in the cryptocurrency space above all others?
In addition to avoiding the crowding out effect, volatility, and accusations of playing favorites (crypto lobbyists did spend approximately $130 million during the last cycle), there is another reason why including non-bitcoin makes strategic sense. Although bitcoin has certainly proven itself to be the most robust, sought-after, and valuable cryptoassets since inception, the rapid rise of AI is set to potentially alter this landscape. As the integration of AI and blockchain continues to accelerate, be it focused on ChatGPT, DeepSeek, or some yet unannounced option, AI-driven crypto could certainly rise to prominence.
Keeping options open at this early stage in the discussions is prudent, and allows for more flexibility as market conditions evolve.
State Level Efforts Can Focus On Bitcoin
Another reason why the news that the federal efforts might take a more diversified approach should not be greeted with universal negativity is that other endeavors continue to focus exclusively on bitcoin. While the specific language in the bills at the individual state level has varied there have been multiple instances of states specifically indicating the intent to establish a strategic reserve of bitcoin. Notable instances of this include, most recently, the states of North Dakota and Utah, with between 12 and 15 other states moving legislation forward (in various stages) centered around digital asset stockpiles.
Wyoming serves as an example as to the power of individual states to move faster than the federal government on the implementation of blockchain and tokenized financial instruments. To date, Wyoming is a leader in legislation pertaining to blockchain utilization in business, is a leader in the usage of DAOs for business purposes, is in the midst of minting and issuing a dollar-backed and state-issued stable token, and is another state that has put forward legislation to establish a strategic bitcoin reserve at the state level.
As always, nimble leadership, increased specificity of direction, and faster execution is possible at the state than federal level, while delegating broad national policy to the policymakers in D.C.
Stablecoins Are Being Supported
One of the most controversial aspects of the crypto conversations, including the one around the executive order, occurring in D.C. is the support and buy-in that Ripple has obtained among policymakers. Bitcoin maximalists, as well as other members of the crypto community, have pointed out many aspects of Ripple (and XRP) that make it a bad fit for a strategic digital asset stockpile. The differences of opinion between the XRP and bitcoin camps have become amplified as lobbying efforts, contribution dollars, and the potential upside of being included (or excluded) from a U.S. digital asset stockpile have moved to the headlines. Ripple CEO, Brad Garlinghouse, has been promoting the U.S. centric options of Ripple, as well as touting the dollar-backed nature of the XRP token.
Taking a step back, the inclusion of XRP in the digital asset stockpile conversation ties directly into the first point made above; any such move by the U.S. needs to be conducted in a strategic manner. Dollar-backed stablecoins, and the tokenization of dollar transactions, are increasingly seen as an important part of maintaining dollar leadership on a global scale. Circle and USDC have also been warmly received (for the most part) by regulators, so it makes perfect sense that – at the federal level – U.S. policymakers are going to seek to promote and champion U.S. based issued of dollar-backed tokens. These dollar-backed tokens are also the most likely path toward crypto-dollars being used as a medium of exchange, a critical step that has yet to occur with bitcoin.
The U.S. digital asset stockpile is well on its way to becoming reality, and while the composition of it will likely leave no members of the crypto community completely happy, it will leave the U.S. with the flexibility and buy-in to further nurture the cryptoasset ecosystem.
