Since early November, when Trump's victory was 'decided,' the cryptocurrency market, especially Bitcoin, has entered a strong expectation of the 'American Bitcoin Strategic Reserve.' Clearly, the market will focus on how this commitment will be implemented 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 drastic market fluctuations. What we can do now is to monitor its progress and anticipate possible timelines for implementation, preparing accordingly.
01 Latest Developments
The issue of 'Bitcoin Strategic Reserve' was actually proposed and discussed before the U.S. presidential election. Senator Cynthia Lummis proposed the (Bitcoin Strategic Reserve Act of 2024) on July 31, 2024, calling for the purchase of 200,000 bitcoins annually, reaching a total of 1 million within five years.
Subsequently, during the campaign process, Trump promised at the Bitcoin conference to become the 'Cryptocurrency President,' and the industry hopes he will fulfill this promise by creating a Bitcoin inventory through executive orders, ensuring that the industry can access banking services, and establishing a cryptocurrency committee.
On December 17, 2024, the Bitcoin Policy Institute (BPI) (not an official organization but a non-profit focused on Bitcoin policy research; however, it remains one of the important think tanks for policymakers on Bitcoin-related issues) recently publicly released a draft of an executive order, attempting to provide reference opinions for the framework of Trump's 'Bitcoin Strategic Reserve' executive order. This draft explicitly proposes: recommending that 1%-5% of Treasury bond assets be used to purchase Bitcoin to form a long-term reserve, led by the Treasury with cooperation from the Federal Reserve, gradually establishing reserves, etc.
On December 19, 2024, Federal Reserve Chairman Powell (expected to continue serving after Trump's inauguration) expressed cautious views at a press conference. Powell stated that the Fed has no intention of participating in any government plan to hoard Bitcoin, as such issues fall within the jurisdiction of Congress, and the Fed is not seeking to change existing laws to allow for Bitcoin holdings.
From the latest situation, despite the conservative opinions of the Federal Reserve chairman, under favorable conditions such as the crypto-friendly U.S. Treasury Secretary nominated by Trump and the swift issuance of 'presidential executive orders' after taking office, these will not affect the Trump team's continued push to include Bitcoin in the U.S. strategic reserves plan.
02 Earliest Implementation Timeline
Given that 'Bitcoin Strategic Reserve' is not a small topic and cannot be executed immediately on a whim by the U.S. president, we will not see its implementation right away. Based on the current administrative orders or legislative processes in the country, if Trump wants to implement the Bitcoin Strategic Reserve, he should immediately have the cryptocurrency committee conduct policy research and feasibility assessments after taking office, formally proposing a plan once completed, which can then proceed through two paths:
Path One: Presidential Executive Orders (Earliest in the second half of 2025)
Issuing an executive order directly after taking office is the fastest route, as it can bypass resistance from conservative and opposing forces such as the Federal Reserve and Congress. It also references the draft provided by the 'Bitcoin Policy Institute' and instructs 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 does not require congressional approval, it can be investigated and legislated by Congress. Executive orders can also be overturned and modified by the next president, so their durability and stability are not as strong 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 the bill undergoes policy research and feasibility assessments by the cryptocurrency committee, it must be submitted to Congress and reviewed by the Senate Banking Committee, followed by passage through the Senate, House of Representatives, and presidential signing before it can be officially enacted.
This process may experience various back-and-forths and is relatively complex. After all, many conservative lawmakers will certainly oppose and obstruct it. Therefore, while this path may ultimately yield a lasting and stable bill, it will take a long time, likely not until the second half of 2026 or 2027.
Recently, news has emerged that the cryptocurrency industry is pushing Trump's team to issue executive orders on his first day in office next month to initiate the promised cryptocurrency policy reforms and help promote the mainstreaming of cryptocurrencies. If this happens through executive orders, we might see the Bitcoin Strategic Reserve implemented by mid-2025.
03 Several Important Time Points
During the process of the relevant executive orders or bills regarding the Bitcoin Strategic Reserve 'going through the procedures,' the following time points may significantly impact the market:
January 20, 2025, around Trump's inauguration ceremony
Trump will officially take office on this day, and from this moment, he can officially start 'issuing orders.' This time point will mark the beginning of the new president's administration, and relevant policy directions may gradually emerge. The market will pay close attention to the inaugural speech and the early issuance of executive orders. Many guests are expected to attend this inauguration, making it quite lively, and the financial markets will also pay close attention.
2) By mid-2025, complete the policy research phase
Based on the timeline, the cryptocurrency committee's policy research is expected to be completed and a feasibility report and draft regarding Bitcoin reserves proposed by mid-2025. Trump can then sign an executive order, marking the formal 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 establishing the framework, the U.S. Treasury, Federal Reserve, and other relevant departments will begin to formulate specific implementation details, including methods of Bitcoin procurement, reserve ratios, asset management rules, etc., and then officially implement them.
During this period, it is unlikely to proceed smoothly, as opposing lawmakers will join in obstructing and dragging it out.
Ultimately, if everything goes smoothly, and the Bitcoin reserve strategy yields objective 'benefits,' it may further promote legislation, which would have a profound impact on the cryptocurrency market landscape.
04 Summary
The path of 'Bitcoin Strategic Reserve' seems full of twists and turns and cannot be implemented overnight. The earliest it could be achieved would be in about six months. Nevertheless, Trump's 'American Bitcoin Strategic Reserve' has created a positive expectation while also 'setting a model' for central banks, financial institutions, and publicly listed companies to research and 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 monitor key time points to make timely adjustments.
