Since early November, when Trump's victory became certain, the cryptocurrency market, especially Bitcoin, has entered a strong expectation for the 'U.S. Bitcoin Strategic Reserve.' It is clear that the market will focus heavily on the implementation of this commitment after Trump takes office in 2025. Some analyses suggest that this will break the Bitcoin bull-bear cycle, meaning that any 'interruption' in the future could lead to significant market fluctuations. What we can do now is to monitor its progress and anticipate potential implementation timelines to prepare accordingly.
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 suggests purchasing 200,000 Bitcoins annually, reaching 1 million within five years.
During the campaign process, Trump promised at the Bitcoin conference in the cryptocurrency industry to become the 'Cryptocurrency President.' The industry hopes he will fulfill his promise to create a Bitcoin inventory through an executive order, ensuring that the industry can access banking services and establish a cryptocurrency committee.
On December 17, 2024, the Bitcoin Policy Institute (BPI) (note: a non-official organization that focuses on Bitcoin policy research and is a non-profit organization, but it remains an important think tank 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. The draft explicitly suggests allocating 1%-5% of treasury assets to purchase Bitcoin to form a long-term reserve, led by the Treasury Department with collaboration 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 a cautious view at a press conference, stating that the Federal Reserve has no intention of participating in any government plan to accumulate Bitcoin. Such issues fall within Congress's jurisdiction, and the Federal Reserve has not sought to change existing laws to allow for the holding of Bitcoin.
From the latest situation, although the Federal Reserve Chairman holds a conservative opinion, under favorable conditions such as the nomination of a cryptocurrency-friendly U.S. Treasury Secretary by Trump and the rapid implementation of 'presidential executive orders,' this will not affect Trump's team from continuing to promote the plan to include Bitcoin in the U.S. strategic reserves.
02 Earliest Implementation Timeline
Given that the 'Bitcoin Strategic Reserve' is not a small issue and cannot be executed immediately on a whim by the U.S. president, we will not see its implementation right away. From the current perspective of the country’s executive orders or legislative processes, if Trump wants to realize the Bitcoin Strategic Reserve, he must immediately let the cryptocurrency committee conduct policy research and feasibility assessments after taking office, formally propose a plan once completed, and then proceed through two paths:
Path One: Presidential Executive Order (Earliest in the second half of 2025)
Issuing an executive order directly after taking office is the fastest path, as it can bypass the conservative resistance from the Federal Reserve and Congress, and is also based on the draft provided by the 'Bitcoin Policy Institute' directing the U.S. Treasury to utilize 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 restricted 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 (Earliest in the second half of 2026)
If a more stable legislative path is pursued, it will require a longer process. After conducting policy research and feasibility assessments through the cryptocurrency committee, the bill must first be submitted to Congress and reviewed by the Senate Banking Committee, then pass through the Senate, House of Representatives, and receive presidential approval before it can be formally completed.
This process may experience various twists and turns and is relatively complex, as many conservative lawmakers will definitely propose opposition and obstruct progress. Therefore, although this path can yield a durable and stable bill, it will take a long time, possibly not realized until the second half of 2026 to 2027.
Recently, news has emerged that the cryptocurrency industry is pushing Trump's team to release an executive order on his first day in office next month, starting the promised cryptocurrency policy reform to help propel the mainstream adoption of cryptocurrency. If this executive order is issued, we may see the realization of the Bitcoin Strategic Reserve as early as mid-2025.
03 Several Important Time Points
During the 'process' of the relevant executive order or legislation regarding the Bitcoin Strategic Reserve, the following 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 surface. The market will pay close attention to the inaugural speech and the early release of executive orders. Trump's inauguration ceremony is expected to be quite lively with many guests invited, and the financial market will also pay great attention.
2) Mid-2025, completing the policy research phase
Based on the timeline, the policy research of the cryptocurrency committee is expected to be completed by 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) Second half of 2025 to early 2026, implementation details and potential congressional disputes
Sign relevant executive orders and determine the relevant framework. The U.S. Treasury Department, Federal Reserve, and other relevant agencies will begin to formulate specific implementation details, including methods for Bitcoin procurement, reserve ratios, asset management rules, etc., and then begin formal implementation.
During this period, it is unlikely to be too smooth, as opposing lawmakers in Congress will join in obstructing and dragging the process.
Ultimately, 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 cryptocurrency market landscape.
04 Summary
The road to the 'Bitcoin Strategic Reserve' appears to be full of twists and turns, and it is not something that can be realized overnight; the earliest it could happen is in six months. Nevertheless, Trump's 'U.S. Bitcoin Strategic Reserve' has created good expectations and has also 'set a precedent' that drives central banks, financial institutions, and publicly listed companies around the world to research 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 up and pay attention to key time points and make timely adjustments.
