Can the first crypto president withstand pressure from all sides and advance the Bitcoin reserve strategy?
Author: Mu Mu
Source: Plain Blockchain
Since the 'certainty' of Trump's victory was established in early November, the crypto market, especially Bitcoin, has entered a strong expectation of a 'U.S. Bitcoin Strategic Reserve.' It is clear that the market will highly focus on the implementation of this commitment after Trump takes office in 2025. Analysts assert that this matter will break the Bitcoin bull-bear cycle; that is to say, any 'interlude' in the future may lead to significant market fluctuations. What we can do now is to pay attention to its progress and anticipate possible timelines for implementation, preparing accordingly.
01 Latest Developments
The matter of the '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, which suggested purchasing 200,000 Bitcoins annually, reaching 1 million within five years.
Later, during the campaign, Trump promised to become the 'cryptocurrency president' during his speech at a Bitcoin conference in the crypto industry. The industry hopes he will fulfill this promise by creating a Bitcoin stockpile through an executive order, ensuring that the industry can access banking services, and establishing a cryptocurrency committee.
On December 17, 2024, the Bitcoin Policy Institute (BPI) (note: it is not an official organization, but a non-profit organization focused on Bitcoin policy research; however, it remains one of the important think tanks for decision-makers on Bitcoin-related issues) recently publicly released a draft of an executive order, attempting to provide reference opinions for Trump's 'Bitcoin Strategic Reserve' executive order framework. 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 Department, with cooperation from the Federal Reserve to gradually establish reserves, etc.
On December 19, 2024, Federal Reserve Chairman Powell (who is expected to continue in office after Trump takes office) expressed a cautious opinion at a press conference, stating that the Federal Reserve has no intention of participating in any plans for the government to hoard Bitcoin; such issues fall within the purview of Congress, and the Federal Reserve is not seeking to change existing laws to allow for Bitcoin holdings.
From the latest situation, although the Federal Reserve Chairman holds a conservative opinion, under favorable conditions like the crypto-friendly U.S. Treasury Secretary nominated by Trump and the rapidly issued 'presidential executive orders' after taking office, these will not affect Trump's team from continuing to push for the inclusion of Bitcoin into the U.S. strategic reserves.
02 Earliest Implementation Time
Given that the 'Bitcoin Strategic Reserve' is not a trivial issue that can be executed on a whim by the U.S. president, we will not see its implementation immediately. From the current administrative order or legislative process in the country, if Trump wants to implement the Bitcoin Strategic Reserve, he must immediately have the cryptocurrency committee conduct policy research and feasibility assessments after taking office, formally proposing a plan afterwards, which can proceed through two paths:
Path One: Presidential Executive Order (Fastest in the second half of 2025)
Issuing an executive order directly after Trump takes office is the fastest path, as it can bypass the conservative and opposing resistance from the Federal Reserve and Congress. It also references the draft provided by the 'Bitcoin Policy Institute,' directing the U.S. Treasury to use the Foreign 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 Foreign Exchange Stabilization Fund does not require congressional approval, it can be investigated and legislatively restricted by Congress. An executive order can also be overturned and modified by the next president, so its durability and stability are not as good as legislation.
Path Two: Congressional Legislation (Fastest in the second half of 2026)
If a more stable legislative path is taken, it would 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 it must pass through the Senate, the House of Representatives, and be signed by the President before the legislation can be officially completed.
This process may experience various reversals and be relatively complex. After all, many conservative lawmakers will certainly raise objections and obstruct the process. Therefore, although this path can yield a lasting and stable bill, it will take a long time, possibly landing between the second half of 2026 and 2027.
Recently, news has emerged that the crypto industry is pushing Trump's team to issue an executive order on the first day of his tenure next month to initiate the promised cryptocurrency policy reforms, helping to push for the mainstream adoption of crypto. If this is done through an executive order, the earliest we might see the Bitcoin Strategic Reserve implemented could be after mid-2025.
03 Several Important Time Points
During the 'process' of relevant executive orders or bills regarding the Bitcoin Strategic Reserve, the following time points 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 onward, he will be able to officially start 'issuing orders.' This time point will mark the beginning of the new president's governance, and relevant policy directions may gradually surface. The market will highly focus on the inaugural speech and the release of early executive orders. For this inauguration ceremony, Trump has invited many guests, and it is expected to be quite lively, with the financial market paying close attention.
2) By mid-2025, complete the policy research phase
Based on the timeline, the policy research of the cryptocurrency committee is expected to be completed by mid-2025, proposing a feasibility report and draft regarding Bitcoin reserves. Subsequently, Trump could sign an executive order, marking the formal introduction of the 'Bitcoin Strategic Reserve.'
3) From the second half of 2025 to early 2026, implementation rules and potential congressional tug-of-war
After signing the relevant executive orders and confirming the relevant framework, the U.S. Treasury Department, the Federal Reserve, and other related departments will begin to draft specific implementation rules, including methods for Bitcoin procurement, reserve ratios, asset management rules, etc., and then formally implement them.
During this period, it should not be too smooth; opposing lawmakers in Congress will join in the obstruction and repeatedly pull back.
Lastly, if everything goes smoothly and the Bitcoin reserve strategy brings objective 'benefits,' it may further promote legislation in the future, which would have a profound impact on the landscape of the crypto market.
04 Summary
The path of the 'Bitcoin Strategic Reserve' seems to be filled with twists and turns; it is not something that can be implemented in a day or two, and the earliest it can happen is in six months. However, regardless of the outcome, Trump's 'U.S. Bitcoin Strategic Reserve' has brought good expectations while also 'setting a model' that has inspired central banks, financial institutions, and publicly listed companies in various countries 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 pay attention to key time points, ready to make adjustments at any time.