In a surprising move, former US President Donald Trump has proposed a plan to establish a national bitcoin stockpile if he is reelected. This announcement has left economists and financial experts scratching their heads.
What Happened: As reported by Wired on Thursday, Trump unveiled his plan at the Bitcoin 2024 conference in Nashville, Tennessee. He pledged to retain all bitcoin currently held or acquired by the US government in the future, estimated to be around 210,000 bitcoin, worth approximately $14 billion.
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While the plan was well-received by conference attendees, economists like James Angel from Georgetown University have expressed skepticism. Angel questioned the economic benefit of such a move, suggesting that it might primarily serve to secure votes from bitcoin enthusiasts.
Trump’s proposal implies an increase in the US bitcoin holdings over time. However, the source of funding for additional acquisitions remains unclear. The options of raising taxes, accruing debt, or printing more US dollars seem to contradict Trump’s goal of reducing inflation and national debt.
Despite the excitement from the bitcoin community, the plan has faced criticism for potentially benefiting a small subset of the population at the expense of others. Michael Green, chief strategist at asset management firm Simplify, compared the situation to the US government promising to pay over the odds for real estate in California, but no other state.
Furthermore, if implemented, Trump’s plan could increase the government’s dependence on bitcoin mining companies, who maintain the underlying network. This could potentially lead to the bitcoin mining industry becoming another special interest group that the US government would have to bail out in case of instability.
The future of Trump’s plan remains uncertain. Angel referred to Trump as a “master demagogue” and suggested that the plan could go the way of Trump Airline, Trump Casino, and Trump University, implying it might not materialize.
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