- The U.S. may establish a strategic Bitcoin reserve under a crypto task force.
- Bernstein suggests funding options, including selling gold or issuing debt.
- A Bitcoin reserve could trigger global central bank adoption and market growth.
A cryptocurrency task force under President Donald Trump is considering the creation of a national Bitcoin reserve. The plan could establish Bitcoin as a strategic asset and motivate other nations to adopt similar measures.
Meanwhile, debate remains about whether the Federal Reserve or the Treasury Department would oversee the Bitcoin reserve. Legislative approval would be necessary if the Fed were to manage the purchase, since it has maintained that current laws do not permit Bitcoin holdings.
Funding the Reserve: Gold, Debt, or Seized Bitcoin?
In a recent statement, brokerage firm Bernstein outlined several possible funding methods for establishing a Bitcoin reserve. One option involves selling part of the US gold reserves, a move that might face public opposition. Interestingly, Wyoming Senator Cynthia Lummis also champions this idea.
In particular, a bill proposed by Lummis advocates for acquiring one million Bitcoin over five years using gold certificates held at the Federal Reserve’s 12 banks.
Another option is issuing debt to finance the acquisition. A third method includes using confiscated Bitcoin. Currently, the US government holds about 200K BTC worth around $20 billion from enforcement actions.
Related: US Crypto Stockpile May Rely on Seized Assets, Analyst Predicts
While some analysts are skeptical that the U.S. government would sell gold to fund Bitcoin purchases, the idea of leveraging confiscated assets could be more politically viable.
Bitcoin Reserve as a Market Driver
Bernstein argued that a national Bitcoin reserve could spark the next bull run. The launch of Bitcoin exchange-traded funds (ETFs) in 2024 demonstrated how institutional adoption can affect market prices.
Anticipation of Bitcoin ETFs initially drove prices from $25,000 to $48,000, and further inflows pushed Bitcoin to $73,750. Optimism surrounding the return of Donald Trump contributed to Bitcoin reaching an all-time high of approximately $110,000. As of this press time, Bitcoin is trading at $95,377, down 1.0% in the last 24 hours.
Related: Trump’s Bitcoin Stockpile Plan: U.S. Reserve Could Hold 1 Million BTC
Institutional investments continue to play a crucial role in Bitcoin’s market trajectory. Abu Dhabi’s Mubadala invested $437 million in BlackRock’s Bitcoin ETF, signaling growing interest from sovereign wealth funds.
MicroStrategy’s continuous Bitcoin accumulation and the potential for more crypto-friendly regulations in the U.S. also add to the positive outlook for Bitcoin’s long-term stability.
Will Bitcoin be the Gold of Crypto Stability?
If the U.S. moves forward with a Bitcoin reserve, it could set off a global trend where central banks begin accumulating Bitcoin as a reserve asset.
“Creating a U.S. Bitcoin reserve could lead to a global race amongst sovereigns to buy BTC,” Bernstein analyst Gautam Chhugani wrote.
However, regulatory challenges and public skepticism might slow the effort. The Federal Reserve’s previous stance against holding Bitcoin remains a significant barrier, and any legislative push to change this policy would likely face intense debate.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
