President Donald Trump’s recent executive order has led to the creation of a “Strategic Bitcoin Reserve” in the United States, signaling strong support for the cryptocurrency sector. White House crypto chief David Sacks has compared the reserve to a “digital Fort Knox,” likening it to the way gold bars are stockpiled in the US military base. The reserve, primarily funded by 200,000 seized bitcoins (valued around US$17 billion), is designed to serve as a long-term store of value, offering protection from financial instability, much like gold, reports AFP/MFT.
The reserve will be virtually secured indefinitely, with additional bitcoin added only if the process is "budget-neutral" and does not burden taxpayers. While the reserve's initial establishment led to a short-term dip in bitcoin’s price, analysts noted that the lack of immediate purchasing action contributed to the volatility. Industry expert Dessislava Aubert highlighted a legal concern: the US government must return a portion of its bitcoin to victims of hacks, such as the 2016 Bitfinex breach, potentially reducing the reserve.
Though the reserve currently holds only bitcoin, there is speculation that other tokens, including ether, XRP, Solana, and Cardano, could join the reserve, as outlined in the executive order. Critics argue that cryptocurrencies, unlike gold, carry higher risks and lack intrinsic value. However, Sacks maintains that holding bitcoin over time would shield the government from the cryptocurrency's short-term volatility.
Bitcoin’s rarity, with its fixed supply of 21 million tokens, is often compared to gold’s value. Additionally, the transparency of the bitcoin reserve, which allows the public to track the reserve’s size in real-time, contrasts with the secrecy surrounding gold reserves. According to Stephane Ifrah, investment director at Coinhouse, bitcoin is a more modern, rare asset, suited for today’s world.
While critics like Molly White view the reserve as a tactic to boost crypto industry interest, Trump’s past promises to make the US the “bitcoin and cryptocurrency capital of the world” have raised concerns about potential conflicts of interest. Trump has also faced scrutiny for financial gains, including his $350 million earnings from the launch of a meme coin, $TRUMP, and reports about his family’s possible stake in Binance.
Globally, other countries have shown interest in cryptocurrency reserves. Brazil has considered a similar initiative, while countries like Germany and Bhutan have ventured into cryptocurrency activity, with Bhutan holding nearly US$900 million in bitcoin.
Despite differing opinions, Trump’s creation of the Strategic Bitcoin Reserve marks a significant step in the government’s embrace of digital assets, reflecting the growing global interest in cryptocurrencies.
Bd-pratidin English/ Jisan
