Trump advocates for bitcoin reserve at crypto convention in Nashville
The US government currently holds around $11.1 billion in cryptocurrencies, mainly from criminal seizures, amounting to 203,239 bitcoin tokens, or 1% of global supply.
At a crypto convention in Nashville, Tennessee, in late July, Donald Trump urged attendees to ‘never sell your bitcoin.’ The speech he held is part of his strategy to attract crypto-focused voters as the November election approaches, and it includes a proposal for a state bitcoin reserve. Trump promised that, if elected, his administration would retain all bitcoin the US government currently holds or acquires in the future, forming a ‘strategic national bitcoin stockpile.’
Trump is not alone in this vision. US Senator Cynthia Lummis has proposed legislation for the government to buy one million bitcoins, around 5% of the total supply. In comparison, independent candidate Robert F. Kennedy Jr. has suggested a stockpile of four million bitcoins. The US government already holds approximately $11.1 billion worth of cryptocurrency, mainly from criminal seizures such as the Silk Road shutdown in 2013.
Currently, the US government possesses about 1% of the global bitcoin supply, which is capped at 21 million coins. Comparatively, private investors like Microstrategy hold around 226,500 bitcoin tokens, while BlackRock’s iShares Bitcoin Trust and Grayscale Bitcoin Trust hold 344,070 and 240,140 tokens, respectively. A government bitcoin reserve could influence bitcoin’s price positively but might also limit the number of tokens available for trading.
Why does this matter?
Despite the uncertainty of a national bitcoin reserve’s implementation, experts are speculating its possible structure. One idea is for the Federal Reserve to manage the reserves for the Treasury Department, similar to gold reserves. Another possibility is a structure akin to the Strategic Petroleum Reserve, with control shared between the president and Congress.
While the concept of a state-controlled bitcoin reserve conflicts with the decentralised nature of cryptocurrency, its increasing prominence in political campaigns is welcomed by the industry. Market players anticipate that both political parties will continue to focus on digital assets beyond the upcoming election.
About author
DW Team
The GIP Digital Watch Observatory team, consisting of over 30 digital policy experts from around the world, excels in the fields of research and analysis on digital policy issues. The team is backed by the creative prowess of Creative Lab Diplo and the technical expertise of the Diplo tech team.