Will Donald Trump make Bitcoin ‘great again?’

During his campaign in 2024, President Donald Trump vowed to create a strategic Bitcoin federal reserve. But when he finally took office, the “plan” almost cooled down to naught, as the tone slowly changed to a “national strategic digital assets stockpile.” Will Trump keep his promise and prioritize Bitcoin? It seems more likely.

Since its creation in 2009 by the pseudonymous Satoshi Nakamoto, Bitcoin has gone through multiple boom-and-bust cycles. That said, none of the ups reached quite as high as when President Donald Trump won the US presidential elections last November.

Some would argue the coin surpassed $100,000 only because of the “Trump Trade,” and they might be right.

Bitcoin was envisioned as an alternative financial system free from government oversight and corporate control. It is now being embraced by the very institutions it sought to “bypass,” and that includes, but not limited to, the US government.

White House ‘excited’ about crypto

The Trump’s administration is actively working to integrate cryptocurrency into most of its financial systems, much to the “thumbs down” notion of the federal reserve. President Trump recently signed an executive order aimed at promoting US leadership in digital assets, with his crypto and AI Czar David Sacks by his side.

Even the US Securities and Exchanges Commission (SEC), an agency that was once very “opinionated,” about the risks of digital currencies, now has a crypto task force designated to investigate the benefits of having a crypto reserve. (Yes, they have forgotten about Gary Gensler that quick).

One of the most controversial proposals under discussion is the creation of a national bitcoin reserve. Enthusiasts argue that such a reserve would solidify the government’s endorsement of the asset, potentially driving prices even higher. “One of the first things we’re going to look at is the feasibility of a bitcoin reserve,” Sacks confirmed in a White House press briefing this month.

Stay focused.

A Strategic Bitcoin Reserve will create up to 81T in wealth for the US.

TL;DR … it’s coming https://t.co/v9QitVOtCJ pic.twitter.com/Y4CNRdbSLF

— STRATEGIC BITCOIN RESERVE (@SBR_coin) January 24, 2025

However, critics warn that establishing a government-backed bitcoin stockpile is a risky move, drawing the the collapse of the crypto exchange FTX in 2022 as a reason for caution.

FTX’s collapse led to widespread bankruptcies and investor losses, and naysayers are arguing that it would be the taxpayers who would be left exposed if bitcoin prices were to plummet, not Trump and his team.

Juan Correa, a strategist at BCA, pointed out concerns about Trump’s involvement in the crypto market, particularly by launching two memecoins with “limited” public availability. According to BCA analysts, the actions “signal a desire for personal enrichment instead of spreading gains to new buyers.”

It’s known that Trump has a knack for putting himself at the centre of everything; that’s just how successful businessmen think. If he sees Bitcoin as the key to taking America’s economy past every other country, best believe the crypto will be part of the US federal government.

Lawmakers lobby the Trump administration to use Bitcoin

Trump’s crypto-friendly policies have emboldened lawmakers to support deeper government involvement in crypto. Senator Cynthia Lummis of Wyoming is leading efforts to establish a strategic bitcoin reserve, arguing that bitcoin’s rising value could help reduce U.S. national debt.

In July 31, 2024, Lummis introduced a legislation dubbed the “BITCOIN ACT” proposing that the government purchase 200,000 bitcoins annually over five years, ultimately amassing a reserve of 1 million tokens. At the time, most policymakers took the proposal with a smile, but for some, cryptocurrency just means doom and gloom.

According to Bitcoin critics, crypto’s anonymity feature makes it difficult to track who the US would be purchasing from, raising fears that illicit actors or foreign adversaries could profit from these transactions, or in other words, “it’s a danger to national security.”

“We need something that isn’t going to be inflated away, something hard and real in reserve. What’s ridiculous is that nothing could be less hard or real than bitcoin,” surmised Hilary Allen, a professor at American University Washington College of Law.

The US government already holds nearly 200,000 bitcoins, primarily seized through criminal investigations. While these holdings have previously been auctioned off, officials, led by Senator Lummis, are pushing for the government to retain and expand its stockpile, which we now know, is almost inevitable.

Wall Street’s improved relationship with Bitcoin

Nonetheless, BTC hasn’t only caught the US government’s attention; major financial institutions are warming up to the asset while waiting for the Republican government’s “regulatory clarity” dust to settle.

At HSBC, a senior foreign exchange strategist has taken on a new role as head of digital assets research, reflecting the bank’s increased focus on crypto. Bank of America, VanEck and Blackrock are also actively exploring opportunities in the space.

FOR IMMEDIATE RELEASE:

VanEck Endorses Strategic Bitcoin Reserve.

No need for ‘sources’—we’ll just tell you ourselves. https://t.co/ZO28dqiBqC

— matthew sigel, recovering CFA (@matthew_sigel) November 19, 2024

Wall Street’s growing involvement follows last year’s decision by US regulators to approve exchange-traded funds (ETFs) holding BTC. The approval opened doors for pension funds, endowments, and institutional investors to allocate capital into the cryptocurrency market, as the public grows more fonder of Bitcoin’s legitimacy.

Regulatory changes have made it easier for banks and asset managers to custody digital assets, while lawsuits against crypto firms are being scaled back.

“If the rules come in and make it a real thing, the banking side will come in hard,” said Bank of America’s chief executive, Brian Moynihan.

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