President Donald Trump’s push for the U.S. government to hold a strategic bitcoin reserve has won the support of some crypto bulls in the U.S. Congress despite doubts that it could be accomplished in the near term.
One prominent supporter, Wyoming Republican Sen. Cynthia Lummis, who introduced the bill for the creation of a strategic bitcoin reserve, said the lack of congressional support remains a major hurdle.
↑
X
Crypto Strategic Reserve Talk From Trump Boosts Bitcoin Despite These Hurdles
“It was hard for me to hear that my colleagues, even on my side of the aisle, were not ready,” Lummis said at the Bitcoin Investor Day event in New York City on Friday.
She cited Tim Scott, chairman of the House Banking Committee, whom she said argued that “we might need to put a pin for a little while in the bitcoin strategic reserve because we’re not there yet,” Lummis said. She says the biggest hurdle facing the creation of a strategic reserve is a lack of congressional support.
Trump’s Bitcoin Push
In a series of social media posts over the weekend, Trump said his administration would move forward with a crypto strategic reserve, naming several tokens that would be included. The named tokens included bitcoin, ethereum, Ripple’s XRP, solana and cardano, all of which soared in value after Trump’s post on Sunday afternoon.
Creating a strategic reserve would effectively establish an institutional price floor for bitcoin and other tokens included in the reserve.
The mechanics behind how a strategic reserve would be created and run are also a source of controversy and debate. It remains unclear if Trump can use executive powers to create a strategic reserve or if it would require an act of Congress.
One alternative is to create a strategic reserve out of bitcoin and other crypto already confiscated through the Department of Justice, although the mechanism of such a transfer remains unclear.
Lummis, an established bitcoin bull, is well-known for her advocacy of bitcoin in government. In July 2024, the senator introduced the bill to establish a strategic bitcoin reserve, where the Treasury would hold all bitcoins for at least 20 years unless used to pay off federal debt. The bill, which is often cited as a concrete way the government can establish a strategic reserve, was referred to the Senate Banking Committee where it has remained.
In 2021, the Wall Street Journal reported that Lummis owned roughly $250,000 of bitcoin.
Crypto Bulls Embrace Move
Bitcoin bulls, meanwhile, remain undeterred. Cathie Wood, ARK Invest CEO, told IBD she fully expects the U.S. government’s confiscated bitcoin will ultimately be used to establish the crypto reserve. She also expects the government to sell some of its land and gold to fund more purchases of bitcoin. “I think we could do some diversification of our asset base and get to that $1 million bitcoin goal with those sorts of asset sales,” she said.
Other pro-bitcoin voices say the one-two punch of a strategic reserve and reduced government regulation are set to provide crypto with its new catalyst for rising valuation. “With regards to regulation, I think it should be clear rules, I think it should allow for international competition,” Matt Cole, Strive Asset Management CEO, told IBD. “You can’t do business in a country if you don’t know the law.”
Crypto Under Biden
During the Biden Administration, the Securities and Exchange Commission pursued multiple investigations with the intent of establishing whether bitcoin and other cryptocurrencies were securities and therefore should fall under SEC jurisdiction, a key step in future regulation. Ongoing cases against Robinhood, Coinbase and other major entities were dismissed by the SEC under the Trump Administration.
Other bitcoin bulls are cooler on the idea of a strategic crypto reserve. “I don’t really think a strategic reserve is absolutely necessary,” Dan Tapiero, CEO and chief investment officer of 1RoundTable Partners & 10T Holdings, told IBD. Tapiero is a leading investor in crypto-focused businesses, with $1.5 billion invested in various crypto-related ventures and funds.
While he thinks a reserve would ultimately help the crypto market and help taxpayers, he remains pessimistic over the mechanics of creating a new reserve. “It’s very complicated when you look at assets that a central bank or a treasury holds,” he said.
But Tapiero remains supportive of the rapid pace the Trump Administration is taking to crypto. “It’s just been fantastic, the speed of change,” he said. “Over the medium term we’re going to see that also lead to an increase in adoption.”
Strategic Reserve News Boosts Bitcoin
Trump’s strategic reserve posts have provided rocket fuel for cryptocurrencies. Bitcoin soared past $90,000 per coin in late Sunday trades on Trump’s posts, this after dipping just below $80,000 on Thursday.
Cryptocurrencies like bitcoin were previously on a hot streak, hitting market highs following in December and January following Trump’s election on expectations of lowered regulations and campaign trail promises of a strategic reserve. But earlier in February, the cryptocurrency took a beating over a risk-off mood from investors, fueled by Trump’s tariff threats and fears about economic shakiness.
Adding to the earlier sour mood around crypto, a recent hack of cryptocurrency exchange Bybit saw more than $1.4 billion in ether stolen through a sophisticated attack on a cold-to-warm wallet transaction. CEO Ben Zhou claims Bybit remains solvent.
Follow Mike Juang on X at @mikejuangnews and on Threads at @namedvillage.
YOU MAY ALSO LIKE:
IBD Live: Follow The Bull Market With Investing Experts
What Is Quantum Computing? And Should You Be Investing In It?
AST SpaceMobile Could Revolutionize Cellphone Satellite Service. But Can It Beat The Meme Stock Rap?
First Solar Could Benefit From Trump’s Energy Policy. Here’s How Investors Can Cash In.
