Can Bitcoin Become the United States’ National Strategic Reserve?

KEYTAKEAWAYS

TABLE OF CONTENTS

• KEY TAKEAWAYS
• TRUMP’S SUPPORT FOR BITCOIN AS A NATIONAL RESERVE
• POTENTIAL IMPACT OF BITCOIN AS A U.S. STRATEGIC RESERVE
• CHALLENGES OF USING BITCOIN AS A NATIONAL RESERVE
• TRUMP’S TRUE MOTIVES: STRATEGIC ASSET OR FINANCIAL TOOL?
• CONCLUSION: WILL BITCOIN BECOME A U.S. RESERVE ASSET?
• DISCLAIMER
• WRITER’S INTRO

CONTENT

In recent years, Bitcoin (BTC) and other cryptocurrencies have gained increasing recognition in global finance. As capital markets show unprecedented interest in digital assets, discussions around Bitcoin’s potential role in national reserves have intensified. Former U.S.

President Donald Trump’s pro-Bitcoin stance during and after his 2024 election campaign has further fueled speculation about whether the U.S. government might adopt Bitcoin as part of its national strategic reserve.

If the U.S. officially integrates Bitcoin into its reserves, it could trigger a major financial shift. Bitcoin would transition from “digital gold” to a core asset in the global financial system. This could push other nations to reconsider their stance on cryptocurrencies and potentially reshape international financial structures.

However, due to policy feasibility, market volatility, regulatory constraints, and opposition from the Federal Reserve, Bitcoin is unlikely to become a true strategic reserve asset. Instead, the U.S. government may use Bitcoin as a financial tool for market influence and profit rather than a core reserve.

TRUMP’S SUPPORT FOR BITCOIN AS A NATIONAL RESERVE

During his 2024 campaign, Trump dramatically changed his stance on Bitcoin. In 2019, he called Bitcoin a scam and supported strict regulation of cryptocurrencies. However, by 2024, he embraced Bitcoin, promising less regulatory interference and even proposing the creation of a White House cryptocurrency advisory committee to help make the U.S. the “world’s crypto capital.”

This shift was driven by several financial and geopolitical factors.

The U.S. federal debt reached $35 trillion in 2024, accounting for 120% of GDP. With fiscal deficits continuing to expand, excessive money printing has led to rising inflation. The declining attractiveness of U.S. Treasury bonds has forced the government to explore alternative financial tools to ease its debt burden.

The dominance of the U.S. dollar in global finance is weakening. By 2024, the dollar’s share in global foreign exchange reserves had dropped to 58%, down from 72% in 2002. Many countries are diversifying their reserve assets, shifting toward local currencies, the euro, the Chinese yuan, and even gold.

Some U.S. policymakers have begun exploring Bitcoin’s decentralized nature as a way to potentially reinforce the dollar’s influence rather than undermine it.

Historically, Wall Street and traditional financial institutions rejected Bitcoin, but this attitude is changing. Asset management giants BlackRock, Fidelity, and Invesco have all applied for Bitcoin ETFs, and in 2024, the U.S. Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs. This regulatory approval indicates that Bitcoin is gaining institutional acceptance as a legitimate asset class.

With these developments, Trump and his allies have initiated discussions on whether Bitcoin could become part of the U.S. national reserves, making the idea more realistic than ever before.

POTENTIAL IMPACT OF BITCOIN AS A U.S. STRATEGIC RESERVE

If the U.S. government officially adds Bitcoin to its strategic reserves, the implications will extend far beyond market speculation. This move could fundamentally alter Bitcoin’s global financial status.

Bitcoin has long remained on the periphery of mainstream finance. Although often referred to as “digital gold,” it has not been officially recognized by governments as a reserve asset. If the U.S. adopts Bitcoin as part of its reserves, it would serve as a powerful endorsement, likely prompting other countries to follow suit.

With Bitcoin as a recognized reserve asset, large institutional investors—sovereign wealth funds, pension funds, and insurance companies—would need to reconsider their investment strategies. Bitcoin would no longer be seen as a speculative asset but as a long-term investment, leading to a surge in institutional capital entering the market.

If the U.S. government begins holding Bitcoin, it may lead to significant financial changes. Some potential consequences include:

• A shift in the U.S. dollar’s role in the global economy, potentially integrating Bitcoin into the international monetary system alongside stablecoins like USDT.
• Other governments reconsidering their stance on Bitcoin, possibly adding Bitcoin to their national reserves to remain competitive in global finance.

CHALLENGES OF USING BITCOIN AS A NATIONAL RESERVE

While the idea of Bitcoin as a U.S. strategic reserve is compelling, significant obstacles prevent its immediate adoption.

Bitcoin is extremely volatile, far more so than traditional reserve assets like gold or oil. For example:

• In 2021, Bitcoin surged to $69,000 before crashing to $16,000, a 77% decline.
• In 2024, Bitcoin reached $73,798 in March but dropped to $54,000 by July.

A national reserve asset must be stable. If the U.S. government holds large amounts of Bitcoin and the price collapses, it could result in substantial financial losses.

Bitcoin’s legal status remains uncertain worldwide. Different jurisdictions classify Bitcoin as a commodity, a security, or a payment method. In the U.S., government agencies such as the Treasury Department, Federal Reserve, and SEC have yet to establish a unified regulatory framework for cryptocurrencies. This lack of clear legal structure makes it difficult to incorporate Bitcoin into national reserves.

The Federal Reserve (Fed) controls U.S. monetary policy and is unlikely to support the idea of adding Bitcoin to national reserves. Instead, the Fed prefers to develop its own Central Bank Digital Currency (CBDC) to maintain control over the financial system. Even if Trump wins the presidency, he cannot easily force the Fed to accept Bitcoin as a reserve asset.

Bitcoin storage and security risks remain a major concern. A national reserve requires absolute protection, but Bitcoin faces multiple security threats, including:

• Hacking and cyberattacks targeting government-held Bitcoin.
• Loss of private keys, which would make Bitcoin holdings irrecoverable.
• Exchange failures, as seen in the past with major cryptocurrency platform collapses.

These risks complicate Bitcoin’s adoption as a reliable national reserve asset.

TRUMP’S TRUE MOTIVES: STRATEGIC ASSET OR FINANCIAL TOOL?

While discussions about Bitcoin’s role in national reserves continue, Trump’s history suggests that he may view Bitcoin as a financial tool rather than a strategic asset.

• The U.S. government could manipulate Bitcoin prices through public statements, buying low and selling high to generate revenue.
• Stablecoins (such as USDT and USDC) may be used alongside Bitcoin to preserve the dollar’s dominance in global finance.
• The U.S. government has already seized over 200,000 BTC from criminal activities. By continuing to confiscate and strategically use Bitcoin, the government could gain significant financial leverage.

Rather than holding Bitcoin as a long-term reserve, the U.S. may instead use Bitcoin-related financial instruments to benefit from market trends.

CONCLUSION: WILL BITCOIN BECOME A U.S. RESERVE ASSET?

The likelihood of Bitcoin becoming part of the U.S. national reserves is low. A more realistic scenario is that:

• The government may use Bitcoin as a financial tool for market influence and revenue generation rather than a core reserve asset.
• Even if Trump returns to the White House, legal, regulatory, and Federal Reserve opposition will prevent Bitcoin from becoming an official reserve asset.
• Bitcoin may be treated as an alternative asset, but it is unlikely to replace gold or the U.S. dollar in national reserves.

While the global financial system is evolving, it remains uncertain whether Bitcoin will transition from a speculative asset to a government-backed reserve. The financial world is watching closely, but the road to Bitcoin’s adoption at a national level remains long and uncertain.

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