Every bull cycle has a dominant narrative — and this time, it centers on feverish expectation that the U.S. will create a strategic Bitcoin reserve.
The notion of an economic superpower investing in this cryptocurrency was once a pipe dream, but gained momentum when Donald Trump made it one of his campaign pledges… and won the election.
But what exactly would all of this involve? How could it affect Bitcoin’s price? And will this spark an international race that’ll see other countries clamor to build their own stockpiles?
What is a Strategic Bitcoin Reserve?
Supporters argue this is a 21st-century version of stockpiles created for other commodities with limited supplies.
Back in the 1970s, the U.S. created a Strategic Petroleum Reserve — and began storing vast quantities of crude oil in underground caverns, fearful of economic ramifications should supplies run low.
This massive network has the potential to hold up to 713.5 million barrels of crude oil, with the latest figures suggesting it’s at about 50% capacity. The president can allow this oil to be sold if there’s supply disruption — and allow producers to store reserves securely in times of low demand.
The rationale for creating a strategic Bitcoin reserve is that it could offer “a hedge against economic uncertainty and monetary instability.” Stubborn inflation and the threat of de-dollarization have fueled concerns about the future of the greenback.
It’s worth noting that the U.S. has maintained more than 8,000 tonnes of gold reserves for decades — again as a shield against market volatility — and Bitcoiners have long argued this digital asset is a form of “digital gold.”
What Would a Bitcoin Strategic Reserve Look Like?
That’s a good question, and it’s pretty unclear at this point.
The U.S. government currently owns about 200,000 BTC seized from criminals — but rather than being held as an investment, it’s been regularly auctioned off, seeing Uncle Sam miss out on billions in profits.
Trump has suggested that this could be used as the starting point for creating his strategic Bitcoin reserve, but legal questions remain — especially when it comes to moving it out of the Justice Department.
The 47th president’s motivation appears to center on gaining a first-mover advantage over China, and the countries embracing digital assets.
Some Republican lawmakers want this policy to go even further, especially Wyoming’s pro-crypto Senator Cynthia Lummis, who was an early investor in Bitcoin.
Last summer, she unveiled the BITCOIN Act, which calls on the U.S. to acquire a jaw-dropping 1 million BTC over the next five years. That’s about 5% of this cryptocurrency’s total supply of 21 million. To put that figure into context, this would attract a price tag of $100 billion, assuming a single coin was worth $100,000.
This would come with strict rules that the Bitcoin must be held for 20 years, and can only be sold off to pay down federal debt.
Trump hasn’t indicated whether he’s willing to go that far, but it’s interesting to note that Lummis has been tipped to become the first-ever chair of a Senate subcommittee focused on crypto.
How Would It Affect Bitcoin’s Price?
As you’d expect, Bitcoiners are salivating over the impact that such a policy would have on BTC’s value — especially considering the insatiable interest among institutions now that ETFs have been available for a year. Even the prospect of a reserve following Trump’s landslide last November helped this cryptocurrency’s price surge into six-figure territory for the first time.
JAN3 CEO Samson Mow, who has been intimately involved with El Salvador’s Bitcoin efforts, recently told Cryptonews that he believes “significant price appreciation into the $1 million range” lies ahead.
“Many nation-states are actively deepening their investments in Bitcoin, not only as a strategic reserve but also as a tool for enhancing sovereignty and energy production,” he said.
There’s little doubt that the creation of the stockpile would be one of the most bullish developments in Bitcoin’s history, and lead to immense buying pressure.
But some experts have questioned whether or not Bitcoin would be enough to solve America’s financial woes on its own — especially considering that U.S. national debt now stands at $35.5 trillion.
Is it Achievable… or a Good Idea?
With wars waging across two continents, economic challenges, a migration crisis and a divided nation, Trump has no shortage of pressing issues to deal with as his second term gets underway.
It’s difficult to know how a strategic Bitcoin reserve fits into this list of priorities — despite the new president’s enthusiasm on the campaign trail.
And in the worst-case scenario, it’s possible Trump won’t deliver on any of his pro-crypto promises. He won’t be able to run for re-election again, so there’s technically little stopping him from pocketing donations from the industry and reneging on these pledges.
Here’s the thing: even if Trump wants to get this reserve up and running, he’ll face challenges of his own. BitMEX co-founder Arthur Hayes recently warned the president “has at best one year” to enact his most ambitious policy changes — and the razor-thin majority that the Republicans currently enjoy in Congress may evaporate by the end of 2026. Those midterms will also slow down business on The Hill.
NYDIG’s global head of research Greg Cipolaro expressed “caution on expecting immediate changes” in a recent note, adding:
“The U.S. Bitcoin strategic reserve is a highly topical item, but how it comes to be (law vs executive order) and its implementation (acquisition vs using existing seized coins) matter greatly as a catalyst.”
And given Bitcoin’s creation lies in an inherent distrust of governments and financial institutions, is Uncle Sam becoming one of the world’s biggest holders really what Satoshi Nakamoto envisioned?
El Salvador’s Bitcoin reserves
Will Other Countries Follow Suit?
The mere chatter of the U.S. starting to explore a strategic Bitcoin reserve has been enough to get rival economies looking into this policy.
Canadian opposition leader Pierre Poilievre has supported BTC for years — and could also pursue establishing a stockpile if he wins an election that must take place this year.
Lawmakers from Germany to Hong Kong are also calling for their governments to examine this possibility.
El Salvador technically has a strategic reserve too, with the country acquiring 1 BTC a day and making hundreds of millions of dollars in paper profits.
As former Binance CEO Changpeng Zhao told the Bitcoin Middle East and North Africa conference:
“It’s very smart for the U.S. to be doing this — and this also has a knock-on effect to other countries in the world. If the U.S. is doing this, then every other country will have to do this.”
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