The US government is planning to create a Strategic Bitcoin Reserve, and it’s causing quite a stir. Treasury Secretary Scott Bessent recently clarified the plan, walking back earlier statements that denied any intention to buy Bitcoin.
Seized Bitcoin: The Foundation
Bessent announced that Bitcoin already seized by the federal government will form the initial core of this reserve, established by an executive order. The plan is to expand this reserve over time, but the government is looking for ways to do so without adding to the national debt. This aligns with the previous administration’s goal of making the US a “Bitcoin superpower.”
The Backlash and a Senator’s Proposal
Bessent’s initial denial of Bitcoin purchases led to a backlash from the crypto community. This prompted his clarification. Senator Cynthia Lummis, a known Bitcoin supporter, agrees with the budget-neutral approach. She suggests revaluing the existing gold reserves and using the increased value to fund Bitcoin purchases. She also continues to push for her “BITCOIN Act,” which would mandate the government to buy 1 million Bitcoin over five years.
Budget-Neutral Bitcoin Acquisition
Satoshi Action Fund CEO Dennis Porter offered a clever idea: using the yield from already-seized assets to buy Bitcoin. The government could hold onto these assets (like altcoins such as ETH and BNB) and use the interest or staking rewards generated to fund Bitcoin purchases. This way, they could grow their Bitcoin holdings without directly spending taxpayer money.
Current Bitcoin Price
At the time of writing, Bitcoin is trading around $118,800, slightly down for the day.