Original author: Mu Mu, Vernacular Blockchain
Reprinted by: Luke, Mars Finance
Since the "finality" of Trump's victory in early November, the crypto market, especially Bitcoin, has entered a strong expectation of "US Bitcoin Strategic Reserve". Obviously, the market will focus on the implementation of this promise after Trump takes office in 2025. Some analysts bluntly stated that this will break the Bitcoin bull-bear cycle, that is, any "episode" in the future may cause turbulent market conditions. What we can do now is to pay attention to its progress, estimate the possible landing time nodes in advance, and make corresponding preparations.
01 Latest Developments
The issue of "Bitcoin Strategic Reserve" was actually proposed and discussed before the US presidential election. Senator Cynthia Lummis proposed the (US Bitcoin Strategic Reserve Act) (BITCOIN Act of 2024) as early as July 31, 2024. The bill proposed to purchase 200,000 bitcoins each year, reaching 1 million within five years.
Later, during the campaign, Trump promised to become the "cryptocurrency president" in a speech at the crypto industry's Bitcoin conference. The industry hopes that he will fulfill his promise to create a Bitcoin inventory through executive orders, ensure that the industry has access to banking services, and create a cryptocurrency committee.
On December 17, 2024, the Bitcoin Policy Institute (BPI) (note that it is not an official organization, but a non-profit organization focusing on Bitcoin policy research, but it is still one of the important think tanks for decision makers on Bitcoin-related issues) recently released a draft executive order, trying to provide reference opinions for Trump's "Bitcoin Strategic Reserve" executive order framework. This draft clearly proposes: It is recommended that 1%-5% of Treasury assets be used to purchase Bitcoin to form a long-term reserve. Led by the Ministry of Finance and coordinated by the Federal Reserve, the reserve will be gradually established.
On December 19, 2024, Federal Reserve Chairman Powell (who is expected to complete his term after Trump takes office) expressed cautious views at a press conference. Powell said that the Fed has no intention of participating in any government plans to hoard Bitcoin. Such issues fall within the responsibilities of Congress, and the Fed is not seeking to change existing laws to allow the holding of Bitcoin.
Judging from the latest situation, although the Federal Reserve Chairman holds conservative opinions, under favorable conditions such as Trump’s nomination of a crypto-friendly US Treasury Secretary and the "Presidential Executive Order" issued quickly after taking office, these will not affect the Trump team’s continued promotion of plans to include Bitcoin in the US strategic reserves.
02 Fastest landing time
Given that the "Bitcoin Strategic Reserve" is not a small issue and is not something that the US president can implement immediately on a whim, we will not see its implementation immediately. Judging from the country's current executive orders or legislative processes, if Trump wants to implement the Bitcoin Strategic Reserve, he should immediately ask the Cryptocurrency Committee to conduct policy research and feasibility assessment after taking office, and formally propose a plan after completion. Then, it can be implemented through two paths:
Path 1: Presidential Executive Order (as early as the second half of 2025)
The quickest path for Trump to directly issue an executive order after taking office is because it can bypass conservative and opposing resistance from the Federal Reserve and Congress. It also refers to the draft provided by the Bitcoin Policy Institute, instructing the U.S. Treasury to use the Exchange Stabilization Fund (ESF) to directly allocate Bitcoin.
However, although this method is quick and convenient, it also has side effects. Although the Treasury's foreign exchange stabilization fund does not require congressional approval, it can be investigated by Congress and restricted by legislation. Executive orders can also be overturned and amended by the next president, so its durability and stability are not as good as legislation.
Path 2: Congressional legislation (as early as the second half of 2026)
If a more stable legislative path is adopted, a longer process will be required. After the policy research and feasibility assessment by the Cryptocurrency Committee, the bill needs to be submitted to Congress and submitted to the Senate Banking Committee for review, and then signed and passed by the Senate, the House of Representatives and the President before the legislation can be officially completed.
This process may go through various repeated pulls and be relatively complicated. After all, many conservative lawmakers will certainly raise objections and obstruction. Therefore, although a lasting and stable bill can be obtained through this path, it will take a long time, and it may not be implemented until at least the second half of 2026 or 2027.
According to recent news, the crypto industry is pushing Trump's team to issue an executive order on his first day in office next month to launch his promised cryptocurrency policy reforms and help promote the mainstreaming of cryptocurrencies. If the executive order is passed, the implementation of the Bitcoin strategic reserve may be seen as early as mid-2025.
03 Several important time nodes
During the “process” of administrative orders or bills related to the Bitcoin Strategic Reserve, the following time points may have a significant impact on the market:
1) January 20, 2025, around Trump’s inauguration
Trump will be officially inaugurated on this day, and from this time on, Trump will be able to officially start "issuing orders". This time point will mark the beginning of the new president's administration, and relevant policy trends may gradually surface. The market will pay close attention to the inaugural speech and the issuance of early executive orders. Trump has invited many guests to this inauguration ceremony, which is expected to be quite lively, and the financial market will also pay close attention.
2) By mid-2025, the policy research phase will be completed
According to the time calculation, the policy research of the Crypto Commission will be completed as early as the first half to mid-2025, and a feasibility report and draft on Bitcoin reserves will be submitted. Trump can then sign an executive order, marking the official launch of the "Bitcoin Strategic Reserve".
3) Implementation details and potential congressional tussle in late 2025 to early 2026
After the relevant executive orders are signed and the relevant frameworks are determined, the U.S. Treasury Department, the Federal Reserve and other relevant departments will begin to formulate specific implementation details, including Bitcoin procurement methods, reserve ratios, asset management rules, etc., and then formally implement them.
During this period, it is unlikely to be too smooth, as opposing members of Congress will join in the obstruction and pull the plug again and again.
Finally, if everything goes well and the Bitcoin reserve strategy brings objective "benefits", further legislation may be promoted in the future, which will have a profound impact on the crypto market landscape.
04 Summary
The road to "Bitcoin strategic reserve" seems to be full of twists and turns. It is not something that can be implemented in one or two days. It will take at least half a year. But no matter what, Trump's "US Bitcoin Strategic Reserve" has brought good expectations and "set a good example" to drive central banks, financial institutions, and listed companies in various countries to study and explore the feasibility of Bitcoin reserves. Although there may still be many uncertainties in the policy details and the final implementation time, we still need to follow up and pay attention to key time nodes and make adjustments at any time.
