Could The Trump-Established Sovereign Wealth Fund Invest In Bitcoin, Nvidia, TikTok?

President Donald Trump's executive order to create a U.S. Sovereign Wealth Fund (SWF) has triggered debates over its structure, funding and potential investments.

While experts acknowledge its potential to transform U.S. fiscal strategy, significant challenges exist in aligning such a fund with the country's current economic reality as a net debtor.

What Is A Sovereign Wealth Fund?

Unlike the Strategic Bitcoin Reserve (SBR), an earlier proposal that focused exclusively on Bitcoin BTC/USD as a reserve asset, the SWF provides the government with a more flexible framework for investments across diverse asset classes.

Speaking with Benzinga, Sid Powell, CEO of Maple Finance said that the SWF is separate from the SBR in that it is much broader and can include any assets, not just crypto.

This broader mandate allows the SWF to incorporate equities, fixed income, real estate and commodities into its portfolio, giving it strategic diversification beyond the volatility of a single asset class like Bitcoin, he said.

The flexibility of the SWF aligns more closely with traditional sovereign wealth funds globally, such as those in Norway or Singapore, which rely on diversified investments to generate stable, long-term returns.

However, the U.S., unlike these nations, is a net borrower and has no fiscal surplus to seed the fund.

This raises questions about its funding mechanisms.

Powell acknowledged this issue, noting that deficit reduction would be essential for generating surplus capital for the SWF.

"The U.S. is a net borrower today, so it needs to reduce the deficit, which is the task of DOGE, to generate surplus capital to invest," Powell added.

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Would A Sovereign Wealth Fund Invest In Crypto?

This deficit challenge highlights the difficulty of funding the SWF without significantly reshaping fiscal policy or introducing new revenue sources.

Arthur Azizov, CEO of B2BINPAY, emphasized the likely emphasis on non-traditional assets like Bitcoin.

"It's unlikely the SWF will allocate funds to U.S. Treasuries, as the Federal Reserve already holds $4.3 trillion of them," he told Benzinga.

Instead, Azizov pointed to Bitcoin as a centerpiece of the fund, alongside physical gold for diversification.

This view is supported by Trump's favorable stance on cryptocurrency and the involvement of Howard Lutnick, a known crypto advocate, as one of the bill's advisors.

Bitcoin's inclusion in the SWF could mark a dramatic shift in how the U.S. government approaches alternative assets.

Traditionally, sovereign wealth funds prioritize stability and liquidity, favoring assets like equities and government bonds.

Bitcoin, while increasingly regarded as a store of value, remains volatile.

Including Bitcoin would signal a more speculative approach, albeit one that aligns with Trump's broader economic agenda to assert dominance in emerging sectors like blockchain technology.

Speaking about the potential structure of the SWF, James Wo, founder and CEO of DFG told Benzinga that an SWF would invest in a variety of asset classes beyond Bitcoin, including equities, bonds, real estate and technology—Nvidia NVDA and Tesla TSLA come to mind.

He noted that such a fund could also serve strategic national interests, as seen in discussions around the U.S. potentially acquiring a stake in TikTok to prevent its ban.

The inclusion of strategic investments, such as TikTok, suggests the SWF may serve dual purposes: generating returns while supporting national security and technological competitiveness.

This would differentiate it from traditional SWFs, which primarily focus on wealth preservation and economic stabilization.

However, integrating both financial and strategic objectives could introduce complexity, potentially diluting the fund's ability to prioritize pure investment performance.

When Could A Sovereign Wealth Fund Happen?

Experts agree that the U.S.'s status as a net debtor complicates the establishment of an SWF.

Historically, tariff revenues have been proposed as a source of fiscal surplus, but these are often offset by increased government spending.

Wo pointed to the 2018 tariff disputes as an example, where industries affected by retaliatory tariffs required significant government support, eroding any revenue gains.

Moreover, the geopolitical implications of an SWF that heavily invests in Bitcoin or technology companies cannot be ignored.

Such moves could intensify scrutiny from international regulators and trading partners, potentially leading to retaliatory measures that complicate the fund's operations.

While the U.S. SWF has the potential to reposition the country as a long-term investor, its success hinges on addressing fundamental fiscal challenges and balancing its investment strategy.

Experts widely agree that Bitcoin and other alternative assets will play a central role, but diversification across equities, commodities, and strategic investments will be necessary to ensure the fund's stability and effectiveness.

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