Written by: Mu Mu, Plain Language Blockchain
Since early November when Trump's victory was 'certain', the crypto market, especially Bitcoin, has entered a strong expectation of the 'U.S. Bitcoin Strategic Reserve.' Clearly, the market will focus heavily on the implementation of this commitment after Trump takes office in 2025. Some analysts have bluntly stated that this will break the Bitcoin bull-bear cycle, meaning that any 'interruption' in the future could lead to dramatic market fluctuations. What we can do now is to pay attention to its progress, predict possible implementation time nodes in advance, and make appropriate preparations.
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) on July 31, 2024, which suggested purchasing 200,000 Bitcoins annually, reaching 1 million within five years.
Subsequently, during the campaign, Trump promised to become the 'cryptocurrency president' at a Bitcoin conference in the crypto industry, and the industry hopes he will fulfill his promise by creating a Bitcoin reserve 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) (note, it is a non-official organization that focuses on Bitcoin policy research and is a nonprofit organization, but it is still one of the important think tanks for decision-makers on Bitcoin-related issues) recently 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: to recommend using 1%-5% of the national debt assets to purchase Bitcoin to form a long-term reserve, led by the Treasury Department with cooperation from the Federal Reserve, gradually establishing reserves, etc.
On December 19, 2024, Federal Reserve Chairman Powell (expected to continue serving 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 plan to hoard Bitcoin, and such issues fall under the responsibilities of Congress, while the Federal Reserve is not seeking to change existing laws to allow holding Bitcoin.
From the latest situation, although the Federal Reserve Chairman holds conservative opinions, under favorable conditions such as the crypto-friendly U.S. Treasury Secretary nominated by Trump and the swiftly issued 'presidential executive orders' after taking office, these will not affect Trump's team’s continued push to include Bitcoin in the U.S. strategic reserve plan.
02 Earliest Implementation Time
Given that the 'Bitcoin Strategic Reserve' is not a minor issue and cannot be immediately executed just because the U.S. president feels like it, we will not see its implementation immediately. Based on the current administrative order or legislative process in the country, if Trump wants to implement the Bitcoin strategic reserve, he should immediately let the cryptocurrency committee conduct policy research and feasibility assessments after taking office, formally propose a plan after completion, and then proceed through 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 quickest path, as it can bypass resistance from conservatives and opponents from 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, although this method is quick and convenient, there are also side effects. The Treasury’s Exchange Stabilization Fund, although not requiring congressional approval, 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 good as legislation.
Path Two: Congressional Legislation (earliest in the second half of 2026)
If pursuing a more stable legislative path, a longer process will be required, and the bill after the policy research and feasibility assessment by the cryptocurrency committee needs to be submitted to Congress and reviewed by the Senate Banking Committee, then go through the Senate, House of Representatives, and be signed by the president before it can officially complete legislation.
This process may experience various back-and-forths and is relatively complicated. After all, many conservative members of Congress will definitely raise objections and obstruct, so although this path can obtain a durable and stable bill, it will take a long time, possibly only materializing in the second half of 2026 to 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 inauguration next month to initiate his promised cryptocurrency policy reforms and help promote the mainstreaming of crypto. Therefore, if through executive orders, the earliest we might see the implementation of the Bitcoin strategic reserve could be after mid-2025.
03 Several Important Time Nodes
During the processing of the related executive orders or bills regarding the Bitcoin strategic reserve, the following time nodes may significantly impact the market:
1) January 20, 2025, around Trump's inauguration ceremony
Trump will be officially inaugurated on this day, and from this time, he can formally start 'issuing orders.' This timing will mark the beginning of the new president’s policy implementation, and relevant policy trends may gradually surface. The market will closely watch the inauguration speech and the release of early executive orders. This inauguration ceremony has invited many guests and is expected to be quite lively, with the financial market also paying close attention.
2) Mid-2025, completion of the policy research phase
According to the timeline, the policy research of the cryptocurrency committee is expected to be completed in the first half to mid-2025, proposing a feasibility report and draft regarding Bitcoin reserves. Subsequently, 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 conflicts
Sign relevant executive orders and determine the relevant framework. The U.S. Treasury, the Federal Reserve, and other related departments will begin to formulate specific implementation rules, including Bitcoin procurement methods, reserve ratios, asset management rules, etc., and then officially implement them.
During this period, it should not be too smooth, as opposing members of Congress will join the obstruction and drag on repeatedly.
Finally, if everything goes smoothly and the Bitcoin reserve strategy brings objective 'benefits,' it may further promote legislation in the future, which will have a profound impact on the structure of the crypto market.
04 Summary
The path of the 'Bitcoin Strategic Reserve' seems to be full of twists and turns and is not something that can be implemented overnight. The earliest it can happen is in six months. However, regardless of the outcome, Trump's 'U.S. Bitcoin Strategic Reserve' has created good expectations and has also 'set a template' to drive the research and exploration of Bitcoin reserves by central banks, financial institutions, and publicly traded companies around the world. Although the policy details and final implementation timing may still have many uncertainties, we still need to follow and pay attention to key timelines and be ready to make adjustments.
