Original author: Mu Mu, vernacular blockchain
Since Trump’s victory was “a foregone conclusion” in early November, the cryptocurrency market has entered into strong expectations for the “U.S. Bitcoin Strategic Reserve.” Obviously, the market will be highly focused on the implementation of this promise after Trump takes office in 2025. Some analysts bluntly say that this incident will break the Bitcoin bull-bear cycle. In other words, any "episode" in the future may lead to violent market movements. turmoil. What we can do now is to focus on its advancement dynamics, estimate possible landing time points in advance, and make corresponding 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 of 2024) 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 'President of Cryptocurrency' during his speech at a Bitcoin conference in the cryptocurrency industry. The industry hopes he will fulfill this promise by creating a Bitcoin inventory 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 a non-official organization but a nonprofit focused on Bitcoin policy research, still one of the important think tanks for policymakers on Bitcoin-related issues) recently released a draft of an executive order, attempting to provide reference opinions for Trump's 'Bitcoin Strategic Reserve' executive order framework. This draft clearly suggests: allocating 1%-5% of national debt assets for purchasing Bitcoin, to form long-term reserves, 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 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. Such issues fall within the responsibility of Congress, and the Federal Reserve has not sought to change existing laws to allow holding Bitcoin.
From the latest situation, although the Federal Reserve Chairman holds a conservative view, under favorable conditions such as the cryptocurrency-friendly U.S. Treasury Secretary nominated by Trump and the swiftly issued 'Presidential Executive Order' after taking office, these will not affect the Trump team’s continued push to include Bitcoin in the U.S. strategic reserves.
02 Earliest Implementation Time
Given that the 'Bitcoin Strategic Reserve' is not a small topic, and it is not something that the U.S. president can execute immediately on a whim, we will not see its implementation immediately. According to the current administrative orders or legislative processes 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 upon completion, and then proceed through two paths:
Path One: Presidential Executive Order (Earliest in the second half of 2025)
The fastest path for Trump to issue an executive order directly after taking office is because it can bypass the conservative and opposing resistance from the Federal Reserve and Congress and is based on the draft provided by the 'Bitcoin Policy Research Institute', directing the U.S. Treasury to use the Exchange Stabilization Fund (ESF) to directly allocate Bitcoin.
However, this method, while quick and convenient, also has side effects. Although the Treasury's Exchange Stabilization Fund does not require congressional approval, it can still be investigated and 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 (Earliest in the second half of 2026)
If passed through a more stable legislative path, it will require a longer process. Bills that undergo policy research and feasibility assessments by the cryptocurrency committee need to be submitted to Congress and reviewed by the Senate Banking Committee, and then go through the Senate, the House of Representatives, and receive the President's signature before being officially enacted.
This process may experience various repeated pulls and is relatively complex. After all, many conservative lawmakers will certainly raise objections and obstruct progress. Therefore, while this path may lead to a lasting and stable bill, it will take a long time, with the possibility of implementation at least in the second half of 2026 to 2027.
Recently, news has emerged that the cryptocurrency industry is pushing Trump's team to issue an executive order on the first day of his inauguration next month, initiating his promised cryptocurrency policy reforms to help drive the mainstreaming of cryptocurrencies. Therefore, if through an executive order, the earliest we may see the implementation of the Bitcoin strategic reserve 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 several time points may have a significant impact on the market:
1) January 20, 2025, around Trump's inauguration ceremony
Trump will officially take office on this day, and from this time, he can officially start issuing orders. This time point will mark the beginning of the new president's administration, and relevant policy trends may gradually emerge. The market will pay close attention to the inauguration speech and the release of his early executive orders. Many guests are expected to attend this inauguration ceremony, making it quite lively, and the financial market will also give it significant attention.
2) Mid-2025, complete the policy research phase
Based on time estimates, the policy research of the cryptocurrency committee is expected to be completed in the first half to mid-2025, with a feasibility report and draft regarding Bitcoin reserves proposed. Subsequently, Trump can sign an executive order, marking the official launch of the 'Bitcoin Strategic Reserve'.
3) From the second half of 2025 to early 2026, implementation details and potential congressional tug-of-war
Signing relevant executive orders and recognizing related frameworks, the U.S. Treasury, the Federal Reserve, and other relevant departments will start to develop specific implementation details, including Bitcoin procurement methods, reserve ratios, asset management rules, etc., and then begin formal implementation.
During this period, it should not be too smooth, as opposing lawmakers in Congress will join in the obstruction and repeated pulls.
Finally, if everything goes smoothly and the Bitcoin reserve strategy brings objective 'benefits', it may further promote legislation in the future, which will have far-reaching impacts on the cryptocurrency market landscape.
04 Conclusion
The path of the 'Bitcoin Strategic Reserve' seems full of twists and turns and is not something that can be implemented in a day or two; it is at least half a year away. However, regardless of how it goes, Trump’s 'U.S. Bitcoin Strategic Reserve' has brought good expectations while also 'setting a template' to drive the research and exploration of Bitcoin reserves by central banks, financial institutions, and publicly listed companies in various countries. Although policy details and the final implementation time may still have many uncertainties, we still need to follow and pay attention to key time points and adjust our responses accordingly.
(The above content is excerpted and reprinted with permission from partner MarsBit, original link | Source: Plain Language Blockchain)
Statement: This article represents only the author's personal views and opinions and does not represent the views and positions of Block. All content and opinions are for reference only and do not constitute investment advice. Investors should make their own decisions and trades, and the author and Block will not bear any responsibility for direct or indirect losses incurred by investors' trades.
"When can the U.S. 'Bitcoin Strategic Reserve' be implemented at the earliest? Pay attention to 'these several time points'" This article was first published in (Block).
