Republican presidential candidate and former U.S. President Donald Trump speaks during his campaign event in Charlotte, North Carolina, on July 24, 2024.
Marco Bello | Reuters
“For too long, our government has violated the cardinal rule that every bitcoiner knows by heart: Never sell your bitcoin,” Trump said at this year’s Bitcoin conference in Nashville.
“If elected, it will be the policy of my administration, the United States of America, to retain 100% of all bitcoins that the United States government currently holds or acquires into the future,” he said.
Trump’s strategy of permanently holding his bitcoin stake, both during bull and bear markets, is heavily promoted in crypto circles., although this is not the current approach of the US government.
Currently, the U.S. Marshals Service regularly auctions off bitcoin and other cryptocurrencies held in the country’s coffers, such as ether and litecoin. These sales can sometimes cause cryptocurrency prices to plummet, as happened earlier this month when Germany began liquidating hundreds of millions of dollars worth of bitcoin it had seized.
At a closed-door roundtable with a mix of donors ahead of Trump’s remarks Saturday, the former president didn’t discuss the mechanics of his plan, but he said he thought it would make sense for the government to hold bitcoin.
The gathering included investors Tyler and Cameron Winklevoss, musician Kid Rock, Republican Sens. Cynthia Lummis, Bill Hagerty and Marsha Blackburn, and others, according to two people in the room.
Trump’s proposal was less revolutionary than some cryptocurrency enthusiasts had expected, and it failed to match the more radical rhetoric of third-party presidential candidate Robert F. Kennedy Jr.
“My understanding is that tomorrow, President Trump could announce his plan to build a Bitcoin Fort Knox and authorize the U.S. government to purchase one million bitcoins as a strategic reserve asset,” Kennedy said during his own speech at the Bitcoin conference on Friday.
Kennedy went further than Trump, promising to create a strategic reserve of 4 million bitcoins to match the country’s current holdings of gold, some of which is held near the Fort Knox military base. The independent presidential candidate said he would sign an executive order directing the U.S. Treasury to buy 550 bitcoins per day, a move that would radically change how the cryptocurrency is regulated and valued.
As bitcoin becomes an increasingly central issue in the election campaign, driven in large part by the crypto lobby’s growing presence in Washington, Trump’s reluctance to match Kennedy’s commitment to “bitcoin’s Fort Knox” is notable.
But Trump’s reservations reflect the complications of promising a strategic reserve of bitcoins comparable to the gold standard.
The Trump campaign did not immediately respond to a request for comment.
In short, no.
An executive order wouldn’t be enough to create a bitcoin reserve in the United States. The president would likely need new legislation and congressional approval to pass it. Some lawmakers have started that process.
Shortly after Trump’s keynote address at the Bitcoin conference on Saturday, Senator Lummis of Wyoming announced plans to introduce new legislation that would support a strategic reserve of bitcoin.
“In five years, the United States will amass 1 million bitcoins, which is 5% of the global supply,” Lummis said. “And that amount will be held for at least 20 years and can be used for one purpose: to reduce our debt.”
Lummis added that creating such a reserve would help fortify the dollar against rising inflation.
The US government has a hoard of bitcoin assets that it has been collecting from financial criminals in high-profile sting operations.
This existing stock of bitcoins could serve as the basis for the strategic bitcoin reserve, which the US government would build on by regularly purchasing a certain number of bitcoins.
These additional bitcoin purchases would likely be paid for, at least in part, by American taxpayers.
Under Sen. Lummis’ bill, which is expected to be introduced in the coming days, a bitcoin reserve would be funded with “existing funds” from the Treasury Department, which includes tax revenues.
The ultimate goal would be to reduce the federal deficit, Lummis said at the Bitcoin conference, which could potentially offset the initial spending.
Passing legislation to establish a reserve like the one Lummis is proposing would most likely require Republican votes in November: in the White House, the Senate and the House of Representatives.
The risks of such a red wave appeared to have increased through most of July, as Democrats and independents moved away from President Joe Biden.
But with Vice President Kamala Harris leading the Democratic ticket, the 2024 election is a whole new ballgame.
A bitcoin reserve would give the digital currency an even greater level of legitimacy, building on the momentum of Wall Street’s growing adoption of the digital asset.
In January, bitcoin spot exchange-traded funds (ETFs) launched on U.S. markets for the first time with the blessing of the Securities and Exchange Commission (SEC). Many viewed the listing as an event that cemented bitcoin’s place as an asset class that is here to stay.
Still, launching a national reserve would be a dramatic boost for the teenage currency, which launched in 2009 and has since been characterized by volatile performance with occasional profits for its investors. Trump himself was a critic of bitcoin as recently as 2021, when he called the currency a “scam.”
In the short term, bitcoin’s new status could send the price of the cryptocurrency skyrocketing.
“If the U.S. government were to create a strategic reserve, it’s likely that other countries would do the same, and that would drive a lot of bitcoin off the market,” said Fred Thiel, CEO of Marathon Digital. “That would then drive up the overall price.”
For now, bitcoin is holding steady around $68,000 as markets shrug off Trump’s bitcoin promises, which were far less aggressive than expected.