A Standard Chartered analyst posited that the U.S. government could purchase Bitcoin through several budget-neutral ways while carrying out President Donald Trump’s latest executive order.
As detailed by Geoff Kendrick, global head of digital assets research at the UK bank, the strategies would avoid “incremental costs on United States taxpayers” that are prohibited under Trump’s establishment of a strategic Bitcoin reserve on Thursday.
The Trump administration could either “sell gold,” tap the Treasury Department’s so-called Exchange Stabilization Fund (ERF), or work a budget-neutral plan into Sen. Cynthia Lummis’ (R-WY) BITCOIN Act of 2024, Kendrick wrote in a Friday research note.
The U.S. government currently holds 8,133.46 tons of gold in reserve. At current prices, that trove is worth approximately $758 billion, according to data from the World Gold Council.
Trump’s newly signed initiative directs Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick to “develop strategies” for acquiring Bitcoin. That suggests their respective agencies could ultimately determine the administration’s tactics.
The Treasury's ERF, which currently holds $39 billion in net assets, is normally used for exchange market intervention. Kendrick said that acquiring Bitcoin with the funds “would be a clear change of direction” from influencing the U.S. dollar’s exchange rate against foreign currencies.
Meanwhile, Lummis’ BITCOIN Act is still in play.
The legislation was formally introduced in August and, if passed, would direct the U.S. Treasury to purchase 1,000,000 Bitcoin over a five-year span. Kendrick noted that it may be possible to pass Lummis’ bill in a budget-neutral manner as part of a bigger package.
Lummis Introduces Bitcoin Reserve Bill Aiming to Bolster US's Global Financial Standing
Sen. Cynthia Lummis, R-Wyo formally introduced a bill to the U.S. Senate on Wednesday seeking to establish a national Bitcoin reserve as political interest for the industry comes into focus. Dubbed the Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act of 2024, the bill aims to strengthen "the position of the U.S. dollar in the global financial system," per the text of the bill. The legislation was first announced by Lummis during the annua...
Lummis’ bill prohibits the sale of the $17.8 billion worth of Bitcoin that the government already has, according to Arkham Intelligence, because of criminal or civil asset forfeiture proceedings. Trump’s recently signed executive order also blocks the feds from selling its 198,100 BTC stash.
Trump first called for the creation of a strategic Bitcoin reserve on the campaign trail. And his executive order on Thursday established both a Bitcoin reserve and digital asset stockpile, which will contain seized digital assets that the Treasury is authorized to sell.
Trump’s directive does not say that the government is allowed to acquire digital assets for its non-Bitcoin stockpile using funds, even if that’s carried out in a budget neutral manner.
Crypto Czar David Sacks Says US Can HODL Bitcoin Ahead of White House Summit
The U.S. would be in a better position today if Washington had held onto its seized Bitcoin, according to White House Crypto and AI Czar David Sacks. In a Thursday post on X, formerly Twitter, the South African-American entrepreneur said that “it has cost American taxpayers not to have a long-term strategy.” According to Sacks’ calculations, the government has reaped $366 million from selling the asset since authorities began seizing Bitcoin in connection to various crimes. But he estimates the...
Earlier this week, White House Crypto and AI Czar David Sacks hinted at the administration’s renewed focus on Bitcoin. It followed Trump’s call for a “strategic crypto stockpile” on Sunday including Bitcoin, Ethereum, Solana, XRP, and Cardano (ADA).
Sacks said that the U.S. had so far lost out on $17 billion in value by selling seized Bitcoin, while pointing out that the government could just hold onto the coins instead.
Edited by Stacy Elliott.
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