Bitcoins
President Trump’s administration got the ball rolling for a Strategic Bitcoin Reserve (SBR). There’s an internal working group, led by crypto czar David Sacks, that will look into this. This working group needs to come with a result within 80 days. In other words, in less than three months, an SBR could be official U.S. government policy.
But there’s more, Sacks also mentioned stablecoin legislation. This is massive news. And still, that’s not all. Yesterday, President Trump also signed another Executive Order. This EO is to create a Sovereign Wealth Fund. Let’s find out what all these are and what it all means. First, we look into a Strategic Bitcoin Reserve.
Strategic Bitcoin Reserve
The new crypto czar, David Sacks, held a press conference yesterday. He announced that President Trump had tasked to set up a working group. This working group should look into the feasibility of a Strategic Bitcoin Reserve. Sacks made sure not to mention the Strategic Crypto Reserve.
???????? TRUMP’S CRYPTO CZAR JUST SAID THE FIRST THING WE ARE GOING TO LOOK IS THE STRATEGIC #BITCOIN RESERVE ????
IT’S FINALLY HAPPENING ???? pic.twitter.com/Gt2O3xD7bQ
— Vivek⚡️ (@Vivek4real_) February 4, 2025
That’s an important nuance. In case the workgroup decides to move ahead with an SBR, it may be the momentary halt to an SCT. Currently, there are quite a few countries looking at setting up such an SBR. Is this the start of the Golden Crypto age?
El Salvador and Bhutan are currently the only countries who such a reserve in place. As a side note, Bhutan managed to do this by mining Bitcoin with natural resources. It used hydropower.
Other countries that have set the wheels in motion for an SBR, besides the USA, are, for example,
- Argentina
- Brazil
- Chile
- Germany
- Hong Kong
- Japan
- Russia, and a few more.
Source: X
Brazil, Switzerland, and the US, have now legislation in place to take this to the next level. Besides the US as a country, many US states are now also looking into having a federal SBR. Texas wants to be the first state that achieves this.
Stablecoin Legislation
Stablecoin legislation was also on Sacks’ agenda. He emphasized the importance of such regulations. It can help to keep the USD dominance worldwide intact. So, this is an important part of his agenda.
Senator Lummis and Senator Hagerty introduced the ‘Genius Act’. This is a bipartisan regulatory framework for stablecoins. This paves the way for networks that use US based stablecoins to become more adopted. They will also become more valuable.
I’ve said it once, and I’ll say it again: this is the year for digital assets. I joined @SenatorHagerty to introduce the GENIUS Act, fulfilling @POTUS‘s promise to make America the capital of crypto. pic.twitter.com/1OEsfxlLIh
— Senator Cynthia Lummis (@SenLummis) February 4, 2025
These networks need to be able to offer massive scalability as well with deep liquidity. Ripple, Solana, and Sui seem to be in prime position to profit from this. As a result, we can see that you will receive your US salaries in stablecoins. Plus of course all other commercial payments will switch to stables. Think of $USDC and $USDT and other US based stables, like Ripple’s $RLUSD.
This will strengthen the US dollar. Why? Well, simple, really. The stablecoin issuers will start and keep buying US treasuries. This makes sure that the US dollar remains strong and the global reserve currency. Exactly what Trump wants the US dollar to be.
Sovereign Wealth Fund
Now I get to the Sovereign Wealth Fund. The previous topics I discussed are great for crypto. However, this SWF is much bigger. An SBR focuses on one asset, Bitcoin. Even an SCR focuses on one asset class, digital assets.
The concept of the sovereign wealth fund is a little separate (than the Bitcoin reserve).
– David Sacks [4th Feb 2025]
— Mihir (@RhythmicAnalyst) February 4, 2025
In contrast, a Sovereign Wealth Fund allows for a more flexible framework. It allows for investment across various asset classes. For example,
- Equities.
- Fixed income.
- Real estate.
- Commodities.
So, these assets are less volatile than Bitcoin. Nonetheless, Bitcoin can be part of such an SWF. This caused Senator Lummis to mention on X that this is a Big deal. She used the Bitcoin ₿ here as well.
This is a ₿ig deal. https://t.co/ZShfQcEGwc
— Senator Cynthia Lummis (@SenLummis) February 3, 2025
So, according to Wikipedia, an SWF is;
A state-owned investment fund. It invests in real and financial assets such as stocks, bonds, real estate, or precious metals. It can also invest in alternative investments such as private equity funds or hedge funds.
These investments can be global, they are not restricted to one country or the country of origin. In the US, Texas and Alaska already have such a SWF. However, the US as a country never did.
Will Bitcoin Be Part of the Sovereign Wealth Fund?
Furthermore, Bitcoin being part of such a Fund could reshape global finance. According to K33, Norway already holds indirectly Bitcoin in their SWF. However, the US adding this to their SWF would have a much larger impact.
The Norwegian sovereign wealth fund (NBIM) indirectly holds 3,821 BTC, reflecting an increase of 1,375 BTC since June 30, 2024, and a yearly growth of 2,314 BTC—a 153% increase compared to its end-of-year 2023 holdings.
It is important to highlight that this exposure likely… pic.twitter.com/seQ12cM2Rn— Vetle Lunde (@VetleLunde) January 29, 2025
With the current pro crypto stance in Trump’s administration, adding Bitcoin is an option. However, funding such an SWF is a different story.
The US is a net borrower. This means that it borrows more than it lends. That’s where DOGE and Musk come into the picture. DOGE could reduce or, at best, flip this deficit.
Funding such an SWF would mean that the US needs to reshape its fiscal policy or find other resources. So, interesting times ahead. Join us on Discord and X to discuss these topics.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment and informational purposes only. Any information or strategies are thoughts and opinions relevant to accepted levels of risk tolerance of the writer/reviewers, and their risk tolerance may be different from yours.
We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence.
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Anthony Badon Read More