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 bull-bear cycle of Bitcoin, 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.
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Latest Developments
The issue of the 'Bitcoin Strategic Reserve' actually had related proposals and discussions before the US presidential election. Senator Cynthia Lummis proposed the (BITCOIN Act of 2024) on July 31, 2024, which suggests 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 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 an unofficial 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 released a draft of an executive order, attempting to provide reference for the framework of Trump's 'Bitcoin Strategic Reserve' executive order. The draft clearly suggests: recommending that 1%-5% of national debt assets be used to purchase Bitcoin to create a long-term reserve. Led by the Treasury Department, in collaboration with the Federal Reserve, gradually establishing reserves, etc.
On December 19, 2024, Federal Reserve Chairman Powell (who is expected to continue in office after Trump takes office) expressed cautious views at a press conference, stating that the Federal Reserve has no intention of participating in any plans for the government to hoard Bitcoin; such matters fall within the purview of Congress, and the Federal Reserve is not seeking to change existing laws to allow the holding of Bitcoin.
From the latest situation, although the Federal Reserve Chairman holds conservative views, under favorable conditions such as the crypto-friendly US Treasury Secretary nominated by Trump and the quickly introduced 'presidential executive orders' after taking office, these will not affect Trump's team from continuing to promote the inclusion of Bitcoin into the US strategic reserves.
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Earliest Implementation Time
Given that the 'Bitcoin Strategic Reserve' is not a minor issue, it cannot be executed immediately based on the whim of the US President alone. Therefore, we will not see its implementation right away. From the current administrative order or legislative process 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, and formally propose a plan after completion, which can then proceed through two paths:
Path One: Presidential Executive Order (at the earliest in the second half of 2025)
Issuing an executive order directly after Trump takes office is the quickest path, as it can bypass the conservative and opposing resistance from the Federal Reserve and Congress, and it is also based on the draft provided by the 'Bitcoin Policy Institute', instructing the US Treasury Department to use the Exchange Stabilization Fund (ESF) to directly allocate Bitcoin.
However, although this method is quick and convenient, it also has side effects. The Treasury's Exchange Stabilization Fund can be investigated and legislated by Congress, even though it does not require Congressional approval. 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 (at the earliest in the second half of 2026)
If a more stable legislative path is pursued, it will require a longer process. The bill following policy research and feasibility assessment by the cryptocurrency committee must first 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 be formally completed.
This process may experience various back-and-forths and is relatively complex, as many conservative lawmakers are sure to raise objections and obstruct. Therefore, although this path can lead to a lasting and stable bill, it will take a long time, likely not until the second half of 2026 to 2027 for it to be implemented.
Recent news indicates that the crypto industry is pushing Trump's team to issue an executive order on his first day in office next month to initiate the promised cryptocurrency policy reforms and help promote the mainstreaming of cryptocurrencies. If this is done through an executive order, we might see the implementation of the Bitcoin strategic reserve as early as mid-2025.
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Several Important Time Nodes
During the process of the relevant executive orders or bills regarding the Bitcoin strategic reserve 'going through the process', the following time nodes 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 point onward, he can officially begin to 'issue orders'. This time node will mark the beginning of the new president's administration, and related policy directions may gradually emerge. The market will pay close attention to the inaugural speech and the release of early executive orders. This inauguration ceremony is expected to be quite lively with many invited guests, and the financial market will also pay high attention.
2) Mid-2025, completion of the policy research phase
According to the timeline, the cryptocurrency committee's policy research is expected to be completed and a feasibility report and draft regarding the Bitcoin reserve proposed by mid-2025. Subsequently, Trump can sign the 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
Upon signing the relevant executive orders and confirming the related framework, the US Treasury, Federal Reserve, and other relevant departments will begin developing specific implementation details, including the method of Bitcoin procurement, reserve ratios, asset management rules, etc., and then formally implement them.
During this period, it is expected that the process will not be too smooth, as opposing lawmakers in Congress will join in with obstructive actions.
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 landscape of the crypto market.
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Summary
The path of the 'Bitcoin Strategic Reserve' seems to be full of twists and turns, and it is not something that can be implemented overnight; at the earliest, it will take at least half a year. However, in any case, Trump's 'US Bitcoin Strategic Reserve' has brought good expectations while also 'setting a template' for central banks and financial institutions in various countries, as well as listed companies, to study 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 nodes and make timely adjustments.
