Donald Trump during his speech at the 2024 Bitcoin Conference in Nashville, Tennessee.
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NASHVILLE — Former President Donald Trump stopped short of promising to create an official U.S. strategic bitcoin reserve currency during his keynote address Saturday at the largest bitcoin conference of the year.
Instead, the Republican presidential candidate pledged simply to maintain the current level of bitcoin reserves that the US has amassed from seizing assets from financial criminals.
“For too long our government has violated the basic 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 government, the United States of America, to retain 100% of all bitcoins currently owned or acquired by the US government in the future,” he said.
Trump’s strategy of permanently holding your bitcoin stake through both bull and bear markets is strongly encouraged in crypto circles, although it is not the current approach of the US government.
Currently, the US Marshals Service regularly auctions bitcoin as well as other cryptocurrencies found in the country’s coffers, such as ether and litecoin. These sales can sometimes cause cryptocurrency prices to fall, such as earlier this month when Germany began liquidating hundreds of millions of dollars worth of seized bitcoins.
At a closed-door roundtable held with a mix of donors ahead of Trump’s remarks on Saturday, the former president did not discuss the mechanics of his plan, but 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 senators Cynthia Lummis, Bill Hagerty and Marsha Blackburn, among others, according to two people in the room.
Trump’s proposal was less revolutionary than some cryptocurrency enthusiasts expected, and fell short of the more sweeping step by third-party presidential candidate Robert F. Kennedy Jr.
“I understand that tomorrow President Trump may announce his plan to build a bitcoin Fort Knox and authorize the US government to purchase one million bitcoins as a strategic reserve asset,” Kennedy said during his speech at the Bitcoin conference the manufacture.
Kennedy went further than Trump, pledging to create a strategic reserve of 4 million bitcoins to match the country’s current holdings of gold, some of which is located near the military base at Fort Knox. The independent presidential candidate said he would sign an executive order directing the US Treasury Department to buy 550 bitcoins a day, an act that would fundamentally change the way cryptocurrency is regulated and valued.
As bitcoin becomes a more central issue on the campaign trail, fueled in large part by the growing presence of the crypto lobby in Washington, Trump’s reluctance to live up to Kennedy’s “bitcoin Fort Knox” pledge is notable.
But Trump’s reservation speaks to the complications of promising a strategic bitcoin reserve on par with the gold standard.
The Trump campaign did not immediately respond to a request for comment.
Can a president unilaterally start a bitcoin reserve?
In short, no.
An executive order would not be enough to create a bitcoin reserve in the US. The president will likely need new legislation and congressional approval to push it through. Some legislators have begun this process.
Shortly after Trump’s keynote speech at the Bitcoin conference on Saturday, Senator Lummis of Wyoming announced her plan to introduce new legislation that would support a strategic bitcoin reserve.
“In five years, the United States will have amassed 1 million bitcoins, 5% of the world’s supply,” Lummis said. “And that will be held for at least 20 years and can be used for one purpose: To reduce our debt.”
Lummis added that building this kind of reserve would help bolster the dollar against rising inflation.
How would the US fund a bitcoin reserve?
The US government has an accumulation of bitcoin assets that it siphons from financial criminals in high-profile businesses.
This existing bitcoin stockpile could act as the foundation for the strategic bitcoin stockpile, which the US government would tap into by regularly purchasing a certain number of bitcoins.
These additional bitcoin purchases will likely be paid for, at least in part, by US taxpayers.
Under Sen. Lummis’ proposed legislation, which is set to be introduced in the coming days, bitcoin stock would be paid for with Treasury “existing funds,” which include tax revenue.
The ultimate goal would be to reduce the federal deficit, Lummis said at the Bitcoin conference, which could potentially offset the upfront costs.
Passage of reserve-building legislation like the one Lummis is proposing would likely require a Republican sweep of the White House, Senate and House in November.
The odds of that kind of red wave appeared to be increasing for most of July as Democrats and Independents chipped away at President Joe Biden.
But with Vice President Kamala Harris at the top of the Democratic ticket, the 2024 election is a new ball game.
What would happen to bitcoin?
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.
However, the launch of a national reserve would be a stunning boost for the teenage currency, which launched in 2009 and has since seen erratic performance with occasional windfalls for its investors. Trump himself was a bitcoin denier as recently as 2021, when he called the currency a “fraud.”
In the short term, bitcoin’s new status will send the price of the cryptocurrency skyrocketing.
“If the US government created a strategic reserve, then other countries would probably do it as well, and that would pull a whole bunch of bitcoins out of the market,” he said. Marathon DigitalCEO Fred Thiel. “That then drives the whole price.”
For now, bitcoin is holding steady around $68,000 as markets reject Trump’s bitcoin promises, which were far less aggressive than expected.
