What a US Strategic Bitcoin Reserve could look like under Trump’s presidency

Key Takeaways

• Trump’s campaign promise of a US Bitcoin reserve raises questions on its potential impact and implementation.
• Senator Cynthia Lummis’s Bitcoin Act proposes a strategic reserve, outlining an ambitious plan for the government to acquire up to 1 million BTC over five years.

With Donald Trump’s recent election as President of the United States, his campaign promise of creating a strategic Bitcoin reserve is seeing renewed interest.

While the idea has not yet been implemented, many are now wondering how a US Bitcoin reserve could look if it became a reality.

A Strategic Bitcoin Reserve can be understood as a government-held asset aimed at stabilizing the economy during periods of financial disruption.

An analogy for this would be the US Strategic Petroleum Reserve (SPR), created in the 1970s to ensure oil availability during crises. 

Like the SPR, a Bitcoin reserve would act as a financial backstop, supporting economic stability in times of inflation or market turbulence. 

By holding a substantial amount of Bitcoin, the government would secure a hedge against such risks, enhancing its array of economic safeguards.

Proponents believe Bitcoin’s limited supply and decentralized nature make it a strong potential hedge against inflation and market instability, much like gold. 

While the US economy depends on oil as a fundamental resource, Bitcoin does not play such an essential role. 

Critics liken holding a Bitcoin reserve to stockpiling consumer goods rather than vital commodities. Yet, Bitcoin’s global appeal and rising value are fueling the argument that it could become a critical economic asset.

Renewed enthusiasm for a US Bitcoin reserve has been further fueled by Bitcoin’s recent price surge, which nearly reached $90,000 on Monday night.

This momentum aligns with Trump’s presidential win, creating a favorable climate for discussions around how Bitcoin might enhance the country’s economic strategy.

One of the initiative’s strongest advocates is Senator Cynthia Lummis, a Republican from Wyoming known for her commitment to advancing crypto-friendly legislation.

In July, Lummis introduced the “ Bitcoin Act ,” a bill that proposes a decentralized network of secure Bitcoin vaults managed by the US Department of Treasury. 

The act outlines an ambitious plan for the government to acquire up to 200,000 BTC annually over five years, potentially accumulating a total of 1 million BTC, or around 5% of Bitcoin’s total supply.

Following Trump’s victory in the primary election on Tuesday, November 5, Lummis voiced her support enthusiastically on social media, posting on X: 

“WE ARE GOING TO BUILD A STRATEGIC BITCOIN RESERVE.” 

Her Bitcoin Act proposal would be funded by reallocating Federal Reserve assets, including bonds, loans, and gold, currently valued around $7 trillion, without adding to national debt.

Currently, the US government holds about $18 billion worth of Bitcoin seized through criminal cases, according to Arkham Intelligence data .

This existing stockpile could potentially be incorporated into a broader Bitcoin reserve.

Supporters argue that establishing a Bitcoin reserve would signal the US government’s confidence in Bitcoin’s viability, potentially encouraging other countries to follow suit.