Trump’s First-Day Order: Create Federal Bitcoin Stockpile?

Title: Cryptocurrency Advocates Push for a U.S. Government Bitcoin Stockpile Under Trump Administration

As the new Trump administration gears up for its inauguration, the cryptocurrency industry is making a bold push for a groundbreaking initiative that, until recently, would have seemed far-fetched: establishing a government program to buy and hold billions of dollars in Bitcoin. This policy proposal, encapsulated in two comprehensive 50-page documents, is currently being circulated among key figures within the incoming administration, including President-elect Donald J. Trump and his advisers.

During his summer campaign, Trump committed to creating a federal "Bitcoin stockpile" intended to serve as a "permanent national asset to benefit all Americans." Enthusiasts within the cryptocurrency community have embraced this idea, touting it as a potentially transformative program that could help reduce the national debt. While the specifics of this plan remain hotly debated — with the possibility of Trump abandoning it still on the table — lobbying efforts from industry executives have intensified, raising hopes for swift action following the inauguration.

Recently, crypto executives have been in discussions with David Sacks, a venture capitalist appointed by Trump to oversee matters related to crypto and artificial intelligence. According to insiders, the proposed Bitcoin stockpile is a key topic of these conversations, with many advocating for a comprehensive executive order encompassing multiple facets of crypto policy.

"This could be the Day 1 initiative," stated Pete Rizzo, editor at Bitcoin Magazine, a prominent publication in the crypto world. The idea has indeed gained momentum quickly, given the historical context of regulatory crackdowns faced by the industry in previous years.

Current estimates suggest that the U.S. government possesses as much as $19 billion in Bitcoin, primarily obtained through criminal seizures. This vast reserve has prompted calls from some in the crypto sector for the president-elect to simply hold onto these assets using an executive order. Others envision a more ambitious approach involving the government purchasing additional Bitcoin to construct a strategic reserve akin to the country’s gold and oil stockpiles. However, funding such an expansion would likely necessitate congressional approval.

Advocates for the Bitcoin stockpile argue that the profits generated from these holdings could contribute to alleviating the nation’s staggering $36 trillion debt and secure American dominance in a future global economy increasingly reliant on cryptocurrencies. Critics, however, warn that the most significant beneficiaries of such a plan would be existing Bitcoin holders, particularly as the price of the cryptocurrency skyrocketed to a record $100,000 last month. Market reactions to government purchasing intentions could further inflame Bitcoin prices, raising concerns over potential market manipulation.

Economists like Cornell University’s Eswar Prasad have expressed skepticism about the proposal, arguing it would primarily serve the interests of current Bitcoin investors while placing taxpayers at risk. The proposal’s emergence, despite its controversial nature, signals a significant shift in political attitudes towards cryptocurrencies, especially considering Trump’s past disparagement of Bitcoin as a “scam.”

Brad Garlinghouse, CEO of Ripple, noted that he recently dined with Trump and encouraged him to consider a federal stockpile of Bitcoin and other cryptocurrencies. This aligns with a growing sentiment in the industry, particularly among figures like David Bailey, CEO of Bitcoin Magazine, who have actively promoted the stockpile concept within Trump’s inner circle.

The groundwork for this ambitious plan has already been laid, with Senator Cynthia Lummis, a vocal crypto supporter from Wyoming, discussing with Trump’s transition team a proposal for the U.S. to acquire one million Bitcoin over five years. Trump’s transition team has expressed commitment to American leadership in crypto and emerging technologies.

The idea of a government Bitcoin stockpile has been a topic of speculation for years, with past discussions surrounding a reserve intended to complement the nation’s gold holdings. However, it wasn’t until Trump began expressing enthusiasm for cryptocurrencies during his campaign that the notion gained traction.

In July, prior to a significant Bitcoin conference in Nashville, Trump privately met with industry leaders and floated the idea of establishing a Bitcoin stockpile. The bill introduced by Senator Lummis, which called for the acquisition of one million Bitcoin over five years, further solidified this evolving narrative.

In his remarks at the conference, Trump refrained from making explicit calls for additional government purchases of Bitcoin but pledged to make existing holdings central to a national stockpile, referencing Bitcoin as a “marvel of technology.” Following that, he indicated in a recent interview at the New York Stock Exchange that he was likely to support the concept of a crypto stockpile.

The industry seems poised for a major shift, with figures like Michael Saylor of MicroStrategy likening the establishment of a Bitcoin reserve to historic land acquisitions, naming it a pivotal moment for American economic prospects. Meanwhile, companies within the sector are competing to provide secure storage solutions for potential government Bitcoin holdings, indicating robust industry interest in this initiative.

As lobbyists work to shape state legislation towards cryptocurrency stockpiles, the cryptocurrency industry appears increasingly unified in its quest to shape policy in a manner favorable to its interests. This marks an exciting, albeit controversial, moment in the evolution of cryptocurrency policy in the United States, as industry voices advocate for a future where government and digital currencies coexist harmoniously, potentially reshaping the landscape of American finance.