Bitcoin Reserve Can Potentially Secure U.S. Superpower Status

• Trump Can Potentially Secure U.S. Superpower Status For The Century To Come With Bitcoin Reserve

A Bitcoin Reserve would change everything. The U.S. government is close to securing its status as global superpower thanks to President Donald Trump's open-mindedness about a Bitcoin Reserve. The Republican Party seems to be generally on board.

One of the most noteworthy steps towards that direction happened when Sen. Cynthia Lummis of Wyoming proposed a strategic Bitcoin reserve by selling Federal Reserve gold in her proposed bill, The BITCOIN Act, short for Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide. 

Lummis plans to introduce the bill when Congress begins their 2025 session. The bill outlines a plan to purchase 1 million Bitcoin, which encompasses nearly 5 percent of the Bitcoin supply. 

The purchases would cost $90 billion at current Bitcoin prices. The sum could increase, however, as other governments front-run the U.S. purchases. 

"We already have the financial assets in the form of gold certificates to convert to Bitcoin," Lummis said in an interview with Bloomberg. "So the effect on the US balance sheet is pretty neutral."

The bill requires the Treasury Secretary to set up a decentralized network of secure Bitcoin storage facilities distributed across the United States, called the Strategic Bitcoin Reserve for the cold storage of government Bitcoin holdings.

"Just as gold reserves have historically served as a cornerstone of national financial security, Bitcoin represents a digital-age asset capable of enhancing the financial leadership and security of the United States in the 21st century global economy," reads the Bitcoin Act.

Trump's Plan

During the course of his campaign, Trump voiced a plan to set up a strategic Bitcoin reserve. In his plan, the government essentially moves the 200,000 bitcoins it holds from law enforcement asset seizures to a new government reserve. 

The federal government would hold the Bitcoin for 20 years, according to Lummis's bill, before using it to pay down the national debt. The bill, however, currently has no co-sponsors. Polymarket has a 31 percent probability that Trump creates a Bitcoin reserve. 

"It's still putting government money on the line, and Bitcoin has not shown itself to be a particularly stable asset," said Jennifer J. Schulp, director of financial regulation studies at the Cato Institute's Center for Monetary and Financial Alternatives. "The bill asks senators and members of Congress, who may not understand crypto that well, to make a much bigger leap of faith in terms of its long-term viability."

Michael Novogratz, the billionaire head of Galaxy Digital, told Bloomberg Television that he believes there is a low chance that the US would set up a strategic reserve. 

If the US does create such a stockpile, Novogratz predicted that it would push the price of the world's first digital asset  to $500,000.  Other nations would want similar stockpiles. 

How To Get Bitcoin Reserve Done

The Fed could have enough gold to buy 1 million Bitcoin, and still have some leftover. The Fed's balance sheet lists approximately $11 billion worth of gold certificate holdings held by the Treasury. That gold, however, is priced at a statutory price of $42.2222 per ounce since 1973. 

At current spot prices, the gold is worth approximately $675 billion. Selling the gold, though, could lower the market value of the stockpile. 

Trump's plan entailed bitcoins already held by the government. He never said he would buy 1 million bitcoins to add to it. At the same conference, Robert F. Kennedy Jr. pledged to buy Bitcoin to add to the 200,000 bitcoins stockpile, if he were to be elected president. 

Lummis believes her bill will have support in the next Congress. She claims Trump has supported the idea of a reserve to his closest advisers, including people "who understand Bitcoin and its role in our future." 

"A network of secure storage vaults, a purchase program, and other programs, to ensure the strategic management of Bitcoin holdings by the US Federal government."

Lummis' Act sums up its own intent. "Bitcoin represents a digital-age asset capable of enhancing the financial leadership and security of the United States in the 21st century global economy," reads the Act, which requires the Treasury Secretary to hold the Bitcoin for a minimum of twenty years. 

Trump has a chance to secure the future of the U.S. as a global superpower. The Bitcoin Reserve is how he makes it happen.