Just now, David Sacks, the king of encryption and AI, tweeted that Trump signed an executive order to establish a Strategic Bitcoin Reserve. The main content is:
1. The reserve is based on the existing BTC controlled by the federal government, and subsequent confiscated BTC will also enter the reserve.
2. These BTC will not be sold (at least during Trump’s term)
3. The government will not set aside a separate budget (which is what the original text means by “budget-neutral”) to buy BTC
4. Trump delivered on his promise
How to understand the above message?
I think the main points are as follows:
1. This "Strategic Bitcoin Reserve" is not the same as the "Strategic Federal Reserve" bill promoted by Senator Cythia Lummis at the federal level. The former can be directly controlled by the government, while the latter needs to be legislated by Congress; the former itself does not have a separate budget for purchasing BTC (if it needs to be increased, it needs Congressional approval), while the latter will provide a separate budget for purchasing BTC. The goal of the bill is to buy 1 million in 5 years. The source of the budget may come from the revaluation of the value of the existing US gold reserves, thereby expanding the Federal Reserve's asset count and providing a budget for the Treasury to purchase BTC. What David Sacks said, "The government will not acquire other assets for reserve assets," does not mean that the Bitcoin strategic reserve in the public's impression has suddenly become something that only relies on confiscations and does not spend money to buy BTC separately.
2. Can the above executive orders show that Trump has fulfilled his "promise"? On the administrative level, yes. Because there is a limit to what Trump can do on the administrative level. He has basically done what he said during the campaign, such as establishing a BTC strategic reserve (administrative level), establishing a special crypto advisory member, firing and forcing out former SEC Chairman Gensler, and relaxing industry regulations. But on the overall level, the promise has not been fully fulfilled. During the campaign, Trump clearly said that he would also build a federal strategic reserve (Strategic Federal Reserve) and buy more BTC, which is also the content of the bill promoted by Senator Cythia Lummis in Congress.
3. Will Trump announce more about BTC reserves or other positive news? It is possible. He will be the keynote speaker at the White House Crypto Summit to be held tomorrow morning Beijing time. But as mentioned earlier, there is not much he can do about BTC at the administrative level. The most extreme measure is to order the Treasury Department to directly use the Exchange Stabilization Fund to purchase BTC. The funds are already available and do not require additional approval from Congress. The operating goal of the fund is to "stabilize the US dollar exchange rate." But as I mentioned earlier in "A Brief Analysis of Trump's Promotion of SOL XRP ADA National Reserves," Trump's style is to like to make big news with small gains and low-cost and small means. He will not do things that really take a lot of effort, break through big resistance, and have no big returns but only high risks. Although using the Exchange Stabilization Fund to purchase BTC is theoretically within his administrative power, this real action is too extraordinary, and it will bring a lot of trouble in the future, and it may also interfere with Senator Cythia Lummis's promotion of the bill in Congress (the two actions overlap).
4. We need to note that Trump’s main “madman personality” after taking office this time is more distinct. He behaves recklessly externally, hoping to make diplomatic opponents feel that he is a madman who dares to do everything and can do it, so as to obtain political benefits through oppression; internally, he constantly tests through various administrative actions, trying to expand the boundaries of presidential power, including but not limited to the large-scale layoffs of DOGE and forced shutdowns of government employees, intercepting the government budget approved by Congress, etc. He is actually practicing the “one-dollar presidential line”. On the one hand, he has the support of the cabinet team that highly obeys his orders, and on the other hand, the US Supreme Court’s ruling in July last year that the president “enjoys absolute immunity and is not subject to criminal prosecution when exercising executive power for public purposes” also gave him greater confidence. Therefore, it is not ruled out that Trump may change his words and give more exaggerated favorable promises in the face of a large backlash from crypto public opinion, but the implementation is also questionable.
5. Although the general trend of Bitcoin entering the national finance has been hindered, it is still advancing slowly. The key theme we need to pay attention to is still the advancement of the formal Federal Reserve Act and the advancement of the Bitcoin Reserve Act in each state.
