Written by: Mu Mu, Plain Language Blockchain
Since early November when Trump's victory became 'certain', the crypto market, especially Bitcoin, has entered a strong expectation of '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 assert that this will break the Bitcoin bull-bear cycle, meaning that any 'interlude' in the future could lead to drastic market fluctuations. What we can do now is to pay attention to the progress dynamics, anticipate possible implementation time points, and make appropriate preparations.
01 Latest Progress
'Bitcoin Strategic Reserve' has actually been proposed and discussed before the U.S. presidential election. Senator Cynthia Lummis proposed the 'Bitcoin Strategic Reserve Act' (BITCOIN Act of 2024) as early as July 31, 2024, which suggests purchasing 200,000 Bitcoins per year to reach 1 million within five years.
Subsequently, during the campaign, Trump promised to become the 'cryptocurrency president' during his speech at a Bitcoin conference in the crypto industry, and the industry hopes he fulfills his promise by creating a Bitcoin inventory 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 not an official organization but a nonprofit 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 opinions for the framework of Trump's 'Bitcoin Strategic Reserve' executive order. This draft explicitly states: It is recommended to use 1%-5% of the assets in national debt to purchase Bitcoin to form a long-term reserve. Led by the Treasury, in collaboration with the Federal Reserve, gradually establishing reserves, etc.
On December 19, 2024, Federal Reserve Chairman Powell (expected to continue serving after Trump's inauguration) expressed cautious views at a press conference, stating that the Federal Reserve has no intention of participating in any government accumulation of Bitcoin, as such matters fall within the purview of Congress, 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 conservative opinions, under favorable conditions such as the appointment of a crypto-friendly U.S. Treasury Secretary nominated by Trump and the swiftly issued 'presidential executive orders' after taking office, none of these will affect Trump's team from continuing to push for including Bitcoin in the U.S. strategic reserve plan.
02 Earliest Implementation Time
Given that 'Bitcoin Strategic Reserve' is not a small topic that can be executed immediately based on a whim from the U.S. president, we will not see its implementation right away. Based on 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, formally propose a plan afterward, and then proceed through two paths:
Path 1: Presidential Executive Orders (as early as 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 is also based on the draft provided by the 'Bitcoin Policy Institute', directing the U.S. Treasury 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 if it does not require Congressional approval. Executive orders can also be overturned and modified by the next president, so 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, it will require a longer process. After policy research and feasibility assessments are conducted by the cryptocurrency committee, the proposed bill needs to be submitted to Congress and reviewed by the Senate Banking Committee, then passed by the Senate, House of Representatives, and signed by the president before it can be officially completed.
This process may go through various back-and-forths and is relatively complex, as many conservative members of Congress are likely to raise objections and obstruct it. Therefore, although this path can obtain a lasting and stable bill, it will take a long time, possibly only being realized from the second half of 2026 to 2027.
Recently, there have been reports that the crypto industry is pushing for Trump's team to issue an executive order on the first day of his inauguration next month, launching the promised cryptocurrency policy reforms to help promote the mainstreaming of crypto. If this is done 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 process of related executive orders or bills for the Bitcoin Strategic Reserve 'going through procedures', the following several time nodes 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 governance, and relevant policy trends may gradually emerge. The market will pay close attention to the inauguration speech and the release of early executive orders. Trump invited many guests to this inauguration ceremony, which is expected to be quite lively, and the financial market will also pay close attention.
2) By mid-2025, complete the policy research phase
Based on the timeline, the policy research of the cryptocurrency committee is expected to be completed and a feasibility report and draft on Bitcoin reserves proposed by the first half to 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 pullbacks
Sign the relevant executive orders and establish relevant frameworks, and the U.S. Treasury, Federal Reserve, and other relevant departments will begin to formulate specific implementation details, including methods for Bitcoin procurement, reserve ratios, asset management rules, etc., and then formally implement them.
During this period, it is unlikely to go too smoothly, as opposing Congress members will join the obstruction ranks and repeatedly interfere.
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.
04 Summary
The path of 'Bitcoin Strategic Reserve' seems full of twists and turns and is not something that can be implemented overnight; the earliest it could happen is in six months. However, regardless of how things go, Trump's 'U.S. Bitcoin Strategic Reserve' has brought good expectations and has also 'set an example' to drive central banks, financial institutions, and listed companies in various countries to study and explore the feasibility of Bitcoin reserves. Although there may still be many uncertainties regarding policy details and final implementation time, we still need to follow and pay attention to key time nodes and make responsive adjustments at any time.
