is the US going to create a crypto reserve?
Answered at Feb 05, 2025
Is the US Going to Create a Crypto Reserve?
The idea of creating a crypto reserve in the United States is being explored at both the federal and state levels. Here are the key points:
Federal Level
- Proposal for a National Reserve: There is a proposal for a "Strategic Bitcoin Reserve" at the federal level, initially pitched by Senator Cynthia Lummis. This would involve acquiring a significant amount of Bitcoin, with the goal of holding it as a long-term investment. The plan suggests obtaining about $20 billion worth of Bitcoin in the first year and adding more over subsequent years[1].
- President Trump's Support: President Trump has expressed support for evaluating the creation of a national digital asset stockpile, which could be built from government seizures of crypto in criminal cases[1].
State Level
- State Initiatives: Sixteen states are actively considering legislation to invest public funds in digital assets, including Bitcoin. Three more states are poised to join them. Some states, like Michigan and Wisconsin, have already invested parts of their public employees' retirement portfolios into crypto exchange-traded funds[1].
- Potential Impact: If states proceed with these investments, it could lock down billions of dollars in Bitcoin and other digital assets, potentially boosting their value. This also means millions of people could indirectly become crypto investors through their state's financial decisions[1].
Current Status and Predictions##### Predictions and Trends
- Market Impact: The establishment of state and federal crypto reserves could significantly impact the market by reducing the circulating supply of Bitcoin and potentially increasing its value[1].
- Global Trend: Fidelity Digital Assets researchers predict that more nation-states and government entities will consider establishing strategic positions in Bitcoin due to economic challenges like inflation and fiscal deficits[1].
In summary, while there are active discussions and proposals at both federal and state levels to create crypto reserves, no definitive national reserve has been established yet. However, the trend suggests that the U.S. and its states are moving towards greater involvement in digital assets.