Since Trump's victory was 'settled' in early November, the cryptocurrency market has entered a strong expectation for the 'U.S. Bitcoin Strategic Reserve'. Clearly, the market will focus heavily on the implementation of this commitment after Trump takes office in 2025, with some analysts stating that this will break the Bitcoin bull-bear cycle, meaning any future 'interruption' could lead to significant market turbulence. What we can do now is focus on the progress dynamics, anticipate possible implementation time points, and prepare accordingly.

01 Latest Developments

The issue of the 'Bitcoin Strategic Reserve' has actually been proposed and discussed before the U.S. presidential election. Senator Cynthia Lummis proposed the (Bitcoin Act of 2024) on July 31, 2024, which suggested purchasing 200,000 Bitcoins annually and reaching a total of 1 million within five years.

Subsequently, during the campaign, Trump promised to become the 'Cryptocurrency President' at a Bitcoin conference in the cryptocurrency industry, and the industry hopes he will fulfill this 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 not an official organization but a non-profit organization focused on Bitcoin policy research; nevertheless, 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 opinions for Trump's 'Bitcoin Strategic Reserve' executive order framework. This draft explicitly states: it is recommended that 1%-5% of national debt assets be allocated for purchasing Bitcoin to form a long-term reserve. Led by the Treasury Department, with cooperation from the Federal Reserve, it aims to gradually establish reserves.

On December 19, 2024, Federal Reserve Chairman Powell (expected to continue 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 program to stockpile Bitcoin, as such matters fall within the purview of Congress. The Federal Reserve does not seek to change existing laws to allow for the holding of Bitcoin.

From the latest situation, although the Federal Reserve Chairman holds conservative views, under favorable conditions such as the cryptocurrency-friendly U.S. Treasury Secretary nominated by Trump and the rapidly issued 'Presidential Executive Order' after taking office, these will not hinder Trump's team from continuing to promote the inclusion of Bitcoin into the U.S. strategic reserve plan.

02 Earliest Implementation Time

Given that the 'Bitcoin Strategic Reserve' is not a minor issue and cannot be executed immediately by the whim of the U.S. president, we will not see its realization immediately. From the current administrative or legislative processes 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. Once completed, a proposal can be formally presented, and then it can proceed through two paths:

Path 1: Presidential Executive Order (as early as the second half of 2025)

Directly issuing an executive order after Trump takes office is the fastest path since it can bypass the resistance from the Federal Reserve and Congress, and it also references the draft provided by the 'Bitcoin Policy Institute', instructing the U.S. Treasury to utilize the Exchange Stabilization Fund (ESF) for direct Bitcoin allocation.

However, while this method is quick and convenient, it also has side effects. The Treasury's Exchange Stabilization Fund (ESF) may not require congressional approval but can be investigated and limited by Congress. Executive orders can also be overturned or modified by the next president; therefore, their durability and stability are not as good as legislation.

Path 2: Congressional Legislation (as early as the second half of 2026)

If a more stable legislative path is taken, a longer process is needed. After policy research and feasibility assessments by the cryptocurrency committee, the bill 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 officially completed.

This process may experience various back-and-forths and is relatively complex, as many conservative legislators are likely to raise objections and obstruct progress. Therefore, while this path may result in a lasting and stable bill, it will take a long time, likely not being realized until at least the second half of 2026 to 2027.

Recent news indicates that the cryptocurrency 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, helping to promote the mainstream adoption of cryptocurrencies. If this is done through an executive order, we might see the implementation of a Bitcoin strategic reserve as early as 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

Trump will be officially inaugurated on this day, and from this time, he can formally 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 closely watch the inaugural speech and the release of early executive orders. This inauguration ceremony, where Trump has invited many guests, is expected to be quite lively, and the financial market will pay close attention.

2) By mid-2025, complete 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 on Bitcoin reserves proposed by mid-2025. Trump could then sign the executive order, marking the formal 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 related executive orders and defining related frameworks. The U.S. Treasury, Federal Reserve, and other relevant departments will need to begin drafting specific implementation details, including methods for Bitcoin procurement, reserve ratios, asset management rules, etc., and then begin formal implementation.

During this period, it should not be too smooth, as opposing congress members will join in to obstruct and pull back.

Finally, if everything goes smoothly and the Bitcoin reserve strategy yields objective 'benefits', it could further promote legislation in the future, which would have a profound impact on the cryptocurrency market landscape.

04 Summary

The 'Bitcoin Strategic Reserve' path appears to be filled with twists and turns and is not something that can be realized in a day or two; it will take at least six months. Nonetheless, Trump's 'U.S. Bitcoin Strategic Reserve' has brought good expectations and also 'set a model' that encourages central banks, financial institutions, and listed companies worldwide to research and explore the feasibility of Bitcoin reserves. Although there may still be many uncertainties regarding policy details and the final implementation time, we still need to follow and pay attention to key time points and make corresponding adjustments as needed.