Advertisement
Senator Lummis Confirms Bitcoin Reserve Following Trump Win
- Senator Cynthia Lummis took to X / Twitter in the hours after Trump’s victory in the US election to reaffirm her commitment to establishing a federal strategic Bitcoin reserve.
- Lummis first introduced her BITCOIN Act to establish the reserve in July of this year, proposing that the US acquire 1 million BTC over 5 years.
- Establishing the reserve will likely be tough politically, even with a Republican house and senate, as significant pockets of resistance to crypto still remain in the GOP.
Now that the Trumpamaniacs have secured control of the White House for the next four years (and likely control of the congress and senate too), some of those more ‘ambitious’ ideas we’ve been hearing about from the big, orange galoot might now actually get implemented.
One such idea is establishing a strategic Bitcoin reserve — but even with Trump’s resounding victory is that likely to happen? Well, according to pro-Bitcoin senator and ‘Crypto Queen’ of Capitol Hill, Cynthia Lummis, the answer to that question is a resounding ‘yes!’
Just hours after Trump secured victory in yesterday’s vote, Senator Lummis took to X / Twitter to reaffirm her commitment to getting a strategic Bitcoin reserve up and running, in all-caps no less:
The three American flag emojis let you know she really means business.
Despite Lummis’ unbridled optimism, there are still serious hurdles to establishing a Bitcoin reserve — the most notable of which is continued bipartisan scepticism over the long term viability of crypto and a public with limited interest in Bitcoin.
Related: Senator Lummis Presents Official Strategic Bitcoin Reserve Bill
Lummis: Bitcoin Reserve Will Help Hedge Inflation, Tackle Debt
Senator Lummis first introduced the bill to establish a strategic Bitcoin reserve, known as the BITCOIN Act of 2024 (Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide Act) in July of this year. The bill proposes that the US treasury acquire one million Bitcoin, just under 5% of the fully diluted supply, over a five year period.
Lummis says that establishing a strategic Bitcoin reserve will protect against debasement of the US dollar and, over time, will help the nation pay down its US$35 trillion debt — Lummis argues the reserve could see the US pay off half its debt by 2045.
The responsibility for managing the reserve would fall to the Department of Treasury, which already manages the nation’s enormous 8,133 metric ton gold reserve.
Noting the strengthening of risk assets and crypto —led by BTC, which hit an all-time high— immediately following Trump’s win, John Toro, Head of trading at Australian-based digital asset trading firm Zerocap said:
The cryptocurrency community are particularly excited by the expected progression of digit asset regulation, as well as the potential for BTC to be included as an asset base of US foreign reserves.
John Toro, Zerocap What Are the Prospects for A Strategic Bitcoin Reserve?
Realistically it may be difficult for the Trump administration to establish a significant Bitcoin reserve, even with a Republican congress and senate, given that:
- A large, permanent reserve would require passage of legislation through both houses, and despite being under GOP control, there’ll still be plenty of opposition from many individual Republicans senators and congressmen who view Bitcoin as too volatile and risky for the US government to be investing in.
- Limited support in the wider US electorate for Bitcoin, with most people still fairly unfamiliar with the technology and sceptical of its value, making the political case hard to make.
Trump may be able to avoid regulatory obstacles by establishing a limited reserve through an executive order, but perhaps not of the magnitude to have the ‘strategic’ impact most supporters are hoping for.
Another thing worth mentioning, if this strategic reserve is going to be the answer to America’s enormous government debt it’s going to have to be huge — likely far more than 1 million BTC. If the reserve does get established and it acquires the 1 million BTC Lummis has proposed, the price of BTC would need to soar to US$17 million (around a 250x from where it is now) for half of America’s current debt to be able to be paid off. I’m a Bitcoin believer, but even for me that price seems a little optimistic.
Author
Jody McDonald
Jody is a Brisbane-based freelance writer who specialises in writing about business, technology, and the future of work.
