On July 19, 2024, it was reported that former US President Donald Trump was about to make a groundbreaking statement at the 2024 Bitcoin Conference next week. Industry insiders revealed that the former president may plan to use Bitcoin (BTC) as a strategic reserve asset for the United States. However, these claims have not been confirmed by Trump or his staff, and there is no official confirmation yet.
It is reported that the 2024 Bitcoin Conference is scheduled to be held in Nashville, Tennessee, USA next week (July 25-27). Trump himself will attend the conference and deliver a speech on the 27th.
BnkToTheFuture founder Simon Dixon and Satoshi Action Fund co-founder Dennis Porter both shared the rumor on social media, citing reliable sources.
Dennis Porter, co-founder of the Satoshi Action Fund and also a conference attendee, posted on social media that the most likely path for Bitcoin to become a strategic reserve asset of the United States is to become the U.S. Treasury's Exchange Stabilization Fund (ESF).
The following is Dennis Porter’s detailed view on “How to use Bitcoin as a strategic reserve for the United States through the Exchange Stabilization Fund?”
Having Bitcoin as a strategic reserve would be a decisive victory for both the United States and Bitcoin, but one would ask “how can this be achieved?” The most obvious way is through the U.S. Treasury’s Exchange Stabilization Fund (ESF).
Introduction to the Exchange Stabilization Fund (ESF)
The Exchange Stabilization Fund is a special fund operated by the U.S. Treasury. It was established under the Gold Reserve Act of 1934 with the primary purpose of stabilizing the value of the U.S. dollar. The ESF provides the Treasury with a tool to influence exchange rates and promote stability in foreign exchange markets through monetary and gold operations. (Remember that Bitcoin is essentially considered a foreign currency.)
Key features of ESF:
Foreign exchange intervention: The ESF can buy and sell foreign currencies and gold (Bitcoin?) to influence the value of the dollar. This is usually done in coordination with the Federal Reserve System to ensure consistency with broader monetary policy objectives. Intervention can be done in the spot market (immediate delivery) or the forward market (future delivery).
Stabilizing the dollar: By intervening in foreign exchange markets, the ESF aims to stabilize the value of the U.S. dollar relative to other currencies. This helps prevent or mitigate exchange rate fluctuations that could negatively affect international trade and financial stability.
Emergency Financial Operations: The ESF can provide emergency financial support in certain circumstances, such as financial crises or to support specific government fiscal commitments.
How to add Bitcoin to ESF?
Integrating Bitcoin into the ESF would be a novel endeavor given Bitcoin’s unique architecture relative to traditional currencies and commodities. Here are some possible approaches:
Holding Bitcoin as a Reserve Asset: The ESF could begin holding Bitcoin as part of its reserve assets, similar to how it holds foreign currencies and gold. This would diversify the ESF’s assets and provide a hedge against inflation and currency depreciation.
Bitcoin Intervention: The ESF could use Bitcoin to intervene to stabilize the dollar or other currencies. For example, Bitcoin could be bought and sold to influence its exchange rate relative to the dollar (which they should just hold). This would be similar to its current foreign exchange and gold operations.
Providing liquidity: During times of financial stress, the ESF can provide Bitcoin liquidity to markets or institutions in need, helping to stabilize financial conditions and support market confidence.
Policy coordination: Integrating Bitcoin into the ESF will require close coordination with financial regulators to ensure a smooth and consistent process.
Additional Executive Order: Stop the U.S. Marshals' auctions of confiscated Bitcoin and transfer $5.5 billion of Bitcoin to the Treasury's ESF. This may require an executive order. The benefit of this is that the U.S. does not need to purchase Bitcoin on the open market.
The path forward is clear, but it requires courage. If the U.S. can boldly lead, we will have a strategic Bitcoin advantage that can support the U.S. economy and the dollar for decades to come.
The number of visitors and revenue of this conference may set records
Recently, according to foreign media reports, the organizers of the Bitcoin conference that Trump will attend are strengthening security measures to prepare for a record number of spectators. The number of attendees is expected to exceed last year's approximately 12,000 people, and may even reach 25,000 in 2022, setting a new record. Brandon Green, the organizer of the conference, said that since the announcement of Trump's attendance, ticket sales have accelerated, and the final number of spectators is expected to be between 20,000 and 45,000. This conference will provide a unique opportunity for cooperation between the Bitcoin industry and politicians.
In addition, according to the Washington Post, one of the founders of the conference promised Trump that attending the conference could bring him $15 million in revenue. The invitation obtained by the media shows that Trump will hold a campaign fundraising event during the conference. Supporters can pay $60,000 to take a photo with Trump, $100,000 for a double photo, and $844,600 for a photo with Trump at the same table. According to US campaign finance regulations, this is also the upper limit of donations for individuals or entities. People familiar with the matter revealed that Trump's deputy Vance will also attend the fundraising event as a special guest, and the number of attendees is expected to be controlled at 100-150. These guests will also get front-row seats at the Bitcoin conference to watch Trump's speech up close.
