Editor’s Note: The article has been updated to cite the source of the comment.
Republican presidential candidate Donald Trump has stirred the crypto community with his proposal for a state Bitcoin BTC/USD reserve. The plan, announced at a crypto convention in Nashville, Tennessee, suggests that the U.S. government should retain all Bitcoin it currently holds or acquires in the future.
What Happened: Mark Connors, head of global macro at Onramp Bitcoin, suggested that a government Bitcoin stockpile could bolster Bitcoin’s price, Reuters reported on Tuesday.
“It would have a positive impact on price. It would have to because we’ve never had such a limited supply commodity, albeit digital, assume a new state of a reserve asset,” he said.
However, this would also mean fewer tokens available for crypto investors to trade, potentially exposing them to risk if the government decides to sell part of its reserves.
Connors suggested that the Federal Reserve can manage the stockpile for the Treasury Department.
Trump’s plan is not the first of its kind. U.S. Sen. Cynthia Lummis (R-Wyo.) has proposed similar legislation for the U.S. government to purchase one million Bitcoins, and independent candidate Robert F. Kennedy Jr suggested a government stockpile of four million Bitcoins.
The U.S. government currently holds approximately $11.1 billion worth of crypto, including 203,239 Bitcoin tokens, largely acquired from criminal seizures. This represents about 1% of the total global bitcoin supply.
Why It Matters: Trump’s proposal follows his previous statements at the Bitcoin 2024 conference, where he declared that Bitcoin and crypto would “skyrocket like never before” if he returned to power. Trump also promised to fire current SEC Chair Gary Gensler on his first day in office.
Trump’s plan to establish a national bitcoin stockpile has left economists and financial experts skeptical. The proposal comes amid the 2024 presidential race, where the campaign for America’s frontline fintech adopters is gaining traction.
Price Action: At the time of writing, Bitcoin was trading 3.60% higher at $56,030.30, according to Benzinga Pro.
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Image via Midjourney
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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