Donald Trump recently ignited a fiery debate at a crypto convention in Nashville with his bold comments. “Never sell your Bitcoin,” he told an eager crowd, revealing his plan to set up a national Bitcoin (BTC-USD) reserve. If elected, Trump promises his administration will hold onto all of the U.S. government’s Bitcoin and acquire more to create a “strategic national Bitcoin stockpile.” This proposal has sparked a heated discussion, with varying opinions on whether it will ultimately support or destabilize the cryptocurrency market.
The Bold Vision
Trump isn’t alone in this grand vision. U.S. Senator Cynthia Lummis has proposed legislation to purchase a staggering one million Bitcoin, roughly 5% of the total supply. Meanwhile, independent candidate Robert F. Kennedy Jr. has suggested an even more ambitious four-million Bitcoin reserve. Currently, the U.S. government holds around 203,239 Bitcoin, valued at $11.1 billion, mostly seized from criminal enterprises like the infamous Silk Road, according to data from Arkham Intelligence.
Crypto Enthusiasts Weigh In
Market reactions are mixed. According to Reuters, Mark Connors of Onramp Bitcoin views a national Bitcoin reserve as a potential boost for Bitcoin’s price, observing, “We’ve never had such a limited supply commodity, albeit digital, assume a new state of a reserve asset.” However, concerns persist about the impact if the government decides to sell off parts of its reserve, which could lead to significant market upheaval.
Skeptics Sound Off
Not everyone is on board. Jeffrey Miron from the Cato Institute slammed the idea as “utter nonsense,” arguing that it makes no economic sense. Patrick Horan from the Mercatus Center echoed this sentiment, stating, “The price of Bitcoin is very volatile, so it could lead to either large profits or losses for the US government,” he told DL News. Other economists, like George Selgin, worry about Bitcoin’s volatility and the implications for U.S. taxpayers. Horan points out that while Bitcoin holders might see gains, the broader benefits to taxpayers are dubious at best.
Political Play?
Some analysts view Trump’s proposal as a strategic move to court the crypto vote. Miron suggests, “They’re trying to get a whole bunch of donations from crypto bros,” he told DL News. Despite the controversy, the proposal underscores the growing importance of digital assets in political campaigns. Raoul Mewawalla from Mawson Infrastructure Group told Reuters, “There’s a general view in the industry that both parties are paying much more attention to digital assets.”
Future Uncertain
The logistics of a national Bitcoin reserve are still murky. Suggestions range from the Federal Reserve managing it, similar to gold reserves, to a setup like the Strategic Petroleum Reserve, with shared control between the president and Congress. Frank Kelly, senior political strategist at DWS Group, points out that “there’s a lot to parse and figure out.”
What Is Bitcoin’s Price?
At the time of writing, Bitcoin is sitting at $54,926.
