Trump: If elected, will consider Bitcoin as a national strategic reserve, and will also dismiss Gary Gensler!

In his keynote speech at the Bitcoin conference last Saturday, former US President Trump did not actually commit to establishing a formal US Bitcoin strategic reserve. The Republican presidential candidate only promised to maintain the Bitcoin holdings collected unchanged.

At this year's Nashville Bitcoin conference, Trump said, "For a long time, our government has violated the fundamental rule that every Bitcoin enthusiast remembers: never sell your Bitcoin. If elected, the US government will adhere to my administrative policy, that is, to retain all Bitcoin currently held or acquired in the future by the US government, using Bitcoin as a national strategic reserve. Never sell your Bitcoin, Bitcoin and cryptocurrencies will soar in unprecedented ways."

Trump's strategy is to permanently hold Bitcoin in bull and bear markets, which will encourage the cryptocurrency community, although this is not the current practice of the US government.

Furthermore, Trump portrayed himself as a cryptocurrency advocate, contrasting sharply with the Biden administration and other Democrats, stating that it has been proven that the Biden administration and other Democrats are unfriendly to their cause.

Trump said that if elected, he would dismiss the current SEC chairman, Gensler, as his agency's rulings on digital tokens and lawsuits against Bitcoin exchanges have made it a major adversary in the crypto world.

"I will appoint a new SEC chairman who will build the future, not block it," Trump said.

Currently, US federal law enforcement officials often auction off Bitcoin and other cryptocurrencies stored in the national treasury, such as Ethereum and Litecoin. These sales sometimes trigger a drop in cryptocurrency prices, such as Germany beginning to liquidate hundreds of millions of dollars' worth of seized Bitcoin earlier this month.

Before Trump's speech last Saturday, at a closed-door roundtable meeting attended by donors, the former president did not discuss the specific mechanisms of his plan, but he did indicate that he believes it makes sense for the government to hold Bitcoin.

Speaking at the Bitcoin 2024 conference, Trump stated that since its inception, Bitcoin's market value has been increasing and has become the ninth-largest asset by market capitalization globally, soon to surpass silver and possibly gold in the future. However, most people do not know what it is right now.

Trump's proposal was not as revolutionary as some cryptocurrency enthusiasts had expected, nor did it reach the broader proposals of third-party presidential candidate Robert F. Kennedy.

"I know that President Trump may announce his plan tomorrow to establish a Bitcoin strategic reserve and authorize the US government to purchase 1 million Bitcoins as strategic reserve assets," Kennedy said in his Bitcoin conference speech last Friday.

Kennedy went further than Trump, pledging to establish a strategic reserve of 4 million Bitcoins to match the current US gold reserves, with some reserves at military bases near Knox Base. This independent presidential candidate stated that he would sign an executive order directing the US Treasury to purchase 550 Bitcoins daily, a move that would greatly change the regulation and valuation of cryptocurrencies As Bitcoin becomes increasingly important in the U.S. presidential election, this is largely driven by the growing influence of cryptocurrency lobbying groups in Washington, Trump's reluctance to echo Kennedy's "Bitcoin Knox pledge" is noteworthy.

However, Trump's reservation indicates the complexity of committing to establish a Bitcoin strategic reserve equivalent to the gold standard.

An important question

Can the U.S. president unilaterally initiate a Bitcoin reserve? In short, no.

An executive order is not enough to make the U.S. Bitcoin reserve a reality. The president may need new legislation and congressional approval to push it forward, although some lawmakers have already initiated this process.

Shortly after Trump's keynote speech at a Bitcoin conference last Saturday, Wyoming Senator Lummis announced her plan to introduce a new bill supporting a strategic Bitcoin reserve. "Within five years, the U.S. will accumulate 1 million Bitcoins, accounting for 5% of the global supply," Lummis said. "These Bitcoins will be held for at least 20 years and can only be used for one purpose: reducing our debt."

Lummis added that establishing this reserve will help strengthen the dollar against rising inflation.

How will the U.S. fund the Bitcoin reserve?

The U.S. government has accumulated a large amount of Bitcoin assets from financial criminals. Existing Bitcoin reserves can serve as the foundation for a strategic Bitcoin reserve, and the U.S. government will build this reserve by regularly purchasing a certain amount of Bitcoin. These additional Bitcoin purchases are likely to be partially paid by American taxpayers.

According to the bill proposed by Senator Lummis, the bill will be submitted in the coming days, and the Bitcoin reserve will be funded by the Treasury Department's "existing funds," including tax revenues. Lummis said at the Bitcoin conference that the ultimate goal is to reduce the federal deficit, which may offset the initial expenditure.

Legislating to establish a reserve like the one proposed by Lummis may require the Republican Party to achieve a comprehensive victory in November: taking over the White House, Senate, and House of Representatives.

For much of July, as Democrats and independents began to withdraw their support for U.S. President Biden, the possibility of a so-called "red wave" seems to be increasing. However, with Vice President Kamala Harris's rising approval ratings, the 2024 election will be a whole new game.

What will happen to Bitcoin?

A Bitcoin reserve may give digital currency greater legitimacy, building on Wall Street's increasing acceptance of digital assets.

In January of this year, the spot Bitcoin ETF debuted in the U.S. for the first time, with many seeing the listing as a milestone in solidifying Bitcoin's status as an asset class.

Nevertheless, launching a national reserve would be a huge boost for this young currency, which was introduced in 2009 and has been characterized by high volatility, occasionally bringing unexpected fortunes to its investors. Trump himself recently criticized Bitcoin in 2021, calling it a "scam". In the short term, the new status of Bitcoin will cause the price of cryptocurrencies to soar. Fred Thiel, CEO of Marathon Digital, said:

"If the US government establishes a strategic reserve, other countries may also follow suit, which will extract a large amount of Bitcoin from the market and drive up the prices of the entire crypto market."

Currently, Bitcoin is stable at around $68,000, and the market is ignoring Trump's promises about Bitcoin, as these promises are far less radical than expected