Trump Didn’t Deliver on RFK Jr.’s Promise to Build a ‘Bitcoin Fortress Knox’ — Here’s Why
Republican presidential candidate and former U.S. President Donald Trump speaks during a campaign rally in Charlotte, North Carolina, on July 24, 2024.
Marco Bello | Reuters
NASHVILLE — Former President Donald Trump did not promise to establish an official U.S. bitcoin strategic reserve currency during a keynote speech Saturday at the largest conference bitcoin conference of year.
Instead, the Republican presidential candidate pledged only to maintain current levels. hold bitcoin that the United States has accumulated from the seizure of assets from financial crimes.
“For too long, our government has violated the basic rule that every bitcoiner knows by heart: Never sell your bitcoin,” Trump said at this year’s Bitcoin Conference in Nashville.
“If I am elected, it will be the policy of my administration, the United States of America, to retain 100% of the bitcoin that the United States government currently holds or acquires in the future,” he said.
Trump’s strategy of holding your bitcoin holdings forever, through both bull and bear markets, is strongly encouraged in the crypto world, Although this is not the current approach of the US government.
Present, The United States Federal Police Agency regularly auctions Bitcoin as well as other cryptocurrencies are held in the country’s treasury as ether And Litecoin. These sell-offs can sometimes cause a drop in cryptocurrency prices, like earlier this month as Germany begins liquidating hundreds of millions of dollars worth of bitcoin it seized.
In a closed-door meeting with several donors ahead of Trump’s speech on Saturday, the former president did not elaborate on the mechanics of his plan, but he said he thought it made sense for the government to hold bitcoin.
The meeting was attended by investors Tyler and Cameron Winklevoss, musician Kid Rock, Republican Senators Cynthia Lummis, Bill Hagerty and Marsha Blackburn, among others, according to two people in the room.
Trump’s proposal is not as revolutionary as some crypto enthusiasts hoped, nor does it compare to the more comprehensive speech by third-party presidential candidate Robert F. Kennedy Jr.
“I understand that tomorrow President Trump may announce plans to build a Bitcoin Fortress and allow the US government to purchase one million Bitcoins as a strategic reserve asset,” Kennedy said in his speech at the Bitcoin Conference on Friday.
Kennedy went further than Trump, promising to establish a strategic reserve of 4 million bitcoins to match the country’s current gold holdings, some of which are held near the military base at Fort Knox. The independent presidential candidate said he would sign an executive order directing the U.S. Treasury to buy 550 bitcoins per day, a move that would radically change how cryptocurrencies are regulated and priced.
As bitcoin becomes a more central issue in the campaign, largely due to the growing presence of the cryptocurrency lobby in Washington, Trump’s reluctance to follow through on Kennedy’s “Bitcoin Fort Knox” pledge is notable.
But Trump’s reticence shows the complexity of promising a bitcoin strategic reserve on par with the gold standard.
The Trump campaign did not immediately respond to a request for comment.
Can a president launch a bitcoin reserve on his own?
In short, no.
An executive order would not be enough to put the U.S. bitcoin reserve into practice. The president would likely need new legislation and congressional approval to move forward. Some lawmakers have already started that process.
Shortly after Trump’s keynote speech at the Bitcoin Conference on Saturday, Wyoming Senator Lummis announced plans to introduce new legislation supporting a strategic bitcoin reserve.
“Within five years, the United States will have amassed 1 million bitcoins, five percent of the world’s supply,” Lummis said. “And those bitcoins will be held for a minimum of 20 years and can be used for one purpose: Reducing our debt.”
Lummis added that the creation of this type of reserve would help strengthen the dollar in the face of rising inflation.
How will the US fund its bitcoin reserves?
The US government is hoarding large amounts of bitcoin assets it has seized from financial criminals in high-profile crackdowns.
The existing bitcoin reserves could serve as the foundation for a bitcoin strategic reserve that the US government would build by regularly purchasing a certain amount of bitcoin.
These additional bitcoin purchases will likely be paid for, at least in part, by US taxpayers.
Under the bill proposed by Senator Lummis, which is expected to be introduced in the coming days, a bitcoin reserve would be paid for with “existing funds” from the Treasury Department, partly funded by Congress, along with the Federal Reserve System.
Lummis said at the Bitcoin Conference that the ultimate goal is to reduce the federal budget deficit, which would likely offset the initial spending.
What will happen to bitcoin?
Bitcoin reserves would give the digital currency even more legitimacy, given the digital asset’s growing adoption on Wall Street.
In JanuaryThe first bitcoin spot exchange-traded fund has officially launched on the U.S. market with the approval of the U.S. Securities and Exchange Commission. Many see the listing as cementing bitcoin’s status as an asset class that is here to stay.
However, the launch of a national reserve fund would be a huge boost for the nascent currency, which was launched in 2009 and has since been characterized by volatile performance with unexpected returns for investors. Trump himself was a bitcoin critic in 2021, calling the currency “a fraud.”
In the short term, bitcoin’s new position will send the price of this cryptocurrency soaring.
“If the US government creates a strategic reserve, it is likely that other countries will do the same and that will pull a large amount of bitcoin out of the market,” he said. Digital MarathonCEO Fred Thiel. “That will determine the entire price.”
Bitcoin price is currently stable at around $68,000 as the market shrugs off Trump’s promises on bitcoin, which were not as aggressive as expected.
