Donald Trump, speaking at the 2024 Bitcoin Conference in Nashville, Tennessee, did not commit to establishing a strategic reserve of bitcoin for the United States. Instead, the former president and current Republican candidate promised to maintain the current level of bitcoin, which the government acquired through asset seizures from financial criminals.
“For too long, our government has violated the fundamental rule that every bitcoiner knows by heart: never sell your bitcoin,” Trump said in his keynote address. He pledged that if elected, his administration would retain all bitcoin currently held or obtained in the future by the United States.
Trump’s approach of holding bitcoin during market fluctuations has been well-received in some cryptocurrency circles, although it stands in stark contrast to the US Marshals Service’s current practice of auctioning off seized cryptocurrencies. These government auctions can have a negative impact on cryptocurrency prices, as seen recently when Germany liquidated a substantial amount of bitcoin.
In a private roundtable with donors before his speech, Trump avoided detailing the mechanics of his plan, but said it would make sense for the government to keep bitcoin. The meeting included notable attendees such as Tyler and Cameron Winklevoss, musician Kid Rock, and Republican senators Cynthia Lummis, Bill Hagerty, and Marsha Blackburn.
Trump’s proposal fell short of the radical measures some cryptocurrency enthusiasts had predicted and lagged behind more ambitious plans outlined by third-party presidential candidate Robert F. Kennedy Jr. Kennedy had proposed creating a massive bitcoin reserve to match the country’s gold reserves and pledged to sign an executive order requiring the U.S. Treasury to purchase 550 bitcoins a day.
As bitcoin becomes an increasingly prominent issue in political campaigns, largely due to the growing influence of the cryptocurrency lobby in Washington, Trump’s cautious stance contrasts with Kennedy’s bold promises.
Establishing a strategic bitcoin reserve would require more than an executive order, however. It would require new legislation and congressional approval, a process some lawmakers have already begun. After Trump’s speech, Senator Lummis of Wyoming announced plans to introduce legislation to support a strategic bitcoin reserve, with the goal of raising 1 million bitcoins over five years to help reduce the national debt and strengthen the dollar against inflation.
The U.S. government currently holds a significant amount of bitcoin seized from financial criminals, which could serve as the backbone for such a reserve. Further bitcoin purchases would likely have to be funded by taxpayers, with Senator Lummis proposing the use of existing Treasury funds.
The creation of a bitcoin reserve would strengthen the legitimacy of the digital currency, building on the momentum from Wall Street’s growing adoption of bitcoin. The introduction of spot bitcoin exchange-traded funds earlier this year was a significant milestone, confirming bitcoin’s status as a viable asset class.
A national bitcoin reserve would likely cause bitcoin prices to skyrocket, as it would remove a substantial amount of bitcoin from circulation. “If the U.S. government created a strategic reserve, other countries would likely do the same, and that would take a lot of bitcoin off the market,” said Fred Thiel, CEO of Marathon Digital.
For now, bitcoin remains stable around $68,000, with markets showing little reaction to Trump’s less hawkish stance on bitcoin.
