Author: Mu Mu, Plain Language Blockchain
Since Trump’s victory was 'set in stone' in early November, the crypto market, especially Bitcoin, has entered a strong period of expectation for the 'American Bitcoin Strategic Reserve'. Clearly, the market will focus heavily on how this commitment is realized after Trump takes office in 2025. Some analysts assert that this will break the Bitcoin bull-bear cycle, meaning that any 'interruption' in the future could lead to severe market fluctuations. What we can do now is to monitor its progress, anticipate possible implementation time nodes, and make the necessary preparations.
01, Latest Developments
The topic of 'Bitcoin Strategic Reserve' has actually been proposed and discussed even before the U.S. presidential election. Senator Cynthia Lummis proposed the (Bitcoin Strategic Reserve Act) (BITCOIN Act of 2024) on July 31, 2024, which suggests purchasing 200,000 Bitcoins annually, reaching a total of 1 million within five years.
Subsequently, during the campaign, Trump promised to become the 'crypto president' at the Bitcoin conference held by the crypto industry, and the industry hopes he will fulfill this promise by creating a Bitcoin inventory through executive orders to ensure the industry can access banking services and establish a cryptocurrency committee.
On December 17, 2024, the Bitcoin Policy Institute (BPI) - a nonprofit organization focused on Bitcoin policy research, not an official organization - recently published a draft of an executive order, attempting to provide reference suggestions for Trump's 'Bitcoin Strategic Reserve' executive order framework. The draft explicitly states: it is recommended to use 1%-5% of national debt assets to purchase Bitcoin, in order to form a long-term reserve. Led by the Treasury Department, in collaboration with the Federal Reserve, a reserve will be gradually established, among other things.
On December 19, 2024, Federal Reserve Chairman Powell (who is expected to continue his term after Trump takes office) expressed cautious views at a press conference, stating that the Federal Reserve has no intention of participating in any government accumulation of Bitcoin plans. Such issues fall within the jurisdiction of Congress, and the Federal Reserve has not sought to change existing laws to allow for the holding of Bitcoin.
From the latest developments, although the Federal Reserve Chairman holds a conservative opinion, the cryptocurrency-friendly U.S. Treasury Secretary nominated by Trump and the rapid issuance of 'presidential executive orders' after taking office are favorable conditions that will not affect Trump's team from continuing to push the plan to incorporate Bitcoin into the U.S. strategic reserve.
02, Earliest Implementation Time
Given that the 'Bitcoin Strategic Reserve' is not a trivial issue and cannot be executed immediately just because the U.S. president feels like it, we will not see its implementation right away. Based on the current executive order or legislative process in the country, if Trump wants to implement the Bitcoin strategic reserve, he must have the cryptocurrency committee conduct policy research and feasibility assessments immediately after taking office, formally propose a plan after completion, and then proceed via two paths:
Path One: Presidential Executive Order (Earliest in the second half of 2025)
Issuing an executive order directly after Trump takes office is the fastest path, as it can bypass conservative and opposing resistance from the Federal Reserve and Congress. This is also based on the draft provided by the 'Bitcoin Policy Institute', instructing the U.S. Treasury to utilize the Exchange Stabilization Fund (ESF) to directly allocate Bitcoin.
However, while this method is quick and convenient, it also has side effects. Although the Treasury's Exchange Stabilization Fund can operate without congressional approval, it can be subject to congressional investigation and legislative restrictions. Executive orders can also be overturned and modified by the next president, so their durability and stability are not as good as legislation.
Path Two: Congressional Legislation (Earliest in the second half of 2026)
If a more stable legislative path is followed, it will require a longer process. After policy research and feasibility assessment by the cryptocurrency committee, the bill needs to be submitted to Congress and reviewed by the Senate Banking Committee, then passed by the Senate, House of Representatives, and signed by the President before it can officially complete legislation.
This process may go through various back-and-forths and is relatively complex. After all, many conservative lawmakers are sure to raise objections and obstruct, so while this path can yield a lasting, stable bill, it will take a long time, with implementation likely not occurring until at least the second half of 2026 to 2027.
Recently, it has been reported that the crypto industry is pushing Trump's team to issue an executive order on his first day in office next month to initiate his promised cryptocurrency policy reforms and help promote the mainstreaming of cryptocurrencies. Therefore, if implemented through an executive order, we might see the realization of the Bitcoin strategic reserve as early as mid-2025.
03, Several Key Time Nodes
During the process of the related executive order or bill for the 'Bitcoin Strategic Reserve' 'going through the process', several key time nodes may significantly impact the market.
1) January 20, 2025, around Trump’s inauguration ceremony
Trump will officially take office on this day, and from this time, he can officially start 'issuing orders'. This time node will mark the beginning of the new president's governance, and related policy directions may gradually come to light. The market will pay close attention to the inauguration speech and the release of early executive orders. Many guests are expected to attend this inauguration ceremony, making it quite lively, and the financial market will also pay close attention.
2) By mid-2025, complete the policy research phase
Based on the timeline, the policy research by the cryptocurrency committee is expected to be completed and a feasibility report and draft regarding Bitcoin reserves proposed by mid-2025. Following this, Trump can sign the executive order, marking the official introduction of the 'Bitcoin Strategic Reserve'.
3) From the second half of 2025 to early 2026, implementation details and potential congressional tug-of-war.
After signing the relevant executive orders and confirming the related framework, the U.S. Treasury Department, the Federal Reserve, and other related departments will begin to formulate specific implementation details, including Bitcoin procurement methods, reserve ratios, asset management rules, etc., and then start formal implementation.
During this period, it is unlikely to proceed smoothly; opposing lawmakers in Congress will likely join in to obstruct and create delays.
Ultimately, if everything goes smoothly and the Bitcoin reserve strategy brings objective 'benefits,' it may further promote legislation in the future, which would have far-reaching impacts on the crypto market landscape.
04, Summary
The path of the 'Bitcoin Strategic Reserve' seems fraught with twists and turns, and it is not something that can be implemented in just one or two days; the earliest it could happen is in six months. Nevertheless, Trump's 'American Bitcoin Strategic Reserve' has brought good expectations and has 'set a model' that encourages central banks, financial institutions, and publicly listed companies worldwide to explore the feasibility of Bitcoin reserves. Although there may still be many uncertainties regarding policy details and the final implementation timeline, we still need to follow and pay attention to key time nodes and make adjustments accordingly.
