Trump’s executive order is bullish for Bitcoin – but it wasn’t exactly what we expected.
Beaver Bullets:
- President Trump’s recent executive order initiated plans for a U.S. Strategic Bitcoin Reserve, with the potential inclusion of various cryptocurrencies. The order, designed to assess “a national digital asset stockpile”, has sparked debates on whether it will dilute Bitcoin’s value by integrating less popular cryptocurrencies, also known as “sh*tcoins.”
- Ripple CEO (a longtime bad faith actor) supports a wider range of digital assets in the stockpile and gets absolutely torched on X.
- The SEC’s repeal of regulations on banks holding Bitcoin is expected to encourage institutional investment. Internationally, the Czech Republic considers adding Bitcoin to its reserves, while other central banks remain skeptical.
Strategic Sh*tcoin Reserve?
It’s happening folks: President Trump’s official action to begin creating a U.S. Strategic Bitcoin Reserve is underway…
… well, something like that.
Here’s what last Thursday’s executive order – titled “Strengthening American Leadership in Digital Financial Technologies” – declared on the matter.
“The Working Group shall evaluate the potential creation and maintenance of a national digital asset stockpile and propose criteria for establishing such a stockpile, potentially derived from cryptocurrencies lawfully seized by the Federal Government through its law enforcement efforts.”
National ‘Digital Asset’ Stockpile.
Hold on: what happened to the “Bitcoin” stockpile that Trump promised us in July? Is the U.S. gonna buy sh*tcoins too? Have we been rugged?
That’s the talk of the town on Bitcoin Twitter lately, and many aren’t happy about it.
“Bitcoin is losing the lobbying battle,” tweeted British Hodl on the day of the EO. “Bitcoin’s value is being diluted by having it be mixed up with all the sh*tcoins. The lawyers did a number on Bitcoin tonight.”
British’s viewpoint has some weight. In fact, CoinTelegraph confirmed this week that a certain sh*tcoin executive (one universally despised by Bitcoiners) has been in the President’s ear, encouraging him to sneak some other coins into the President’s reserve pile.
“Ripple CEO Brad Garlinghouse revealed he discussed with President Trump making XRP a strategic reserve asset for the US,” the outlet wrote to Twitter. “He stressed that US reserves should include a variety of cryptocurrencies, not just Bitcoin, to support American crypto companies.”
While Garlinghouse’s argument has been roundly mocked online, there is still concern among many that they may successfully derail the President’s focus. After all, Trump’s understanding of Bitcoin – and its differences from crypto – remains limited at best, and he’s already shown openness to launching his own speculative “crypto” projects, from NFTs to his own $TRUMP token.
Strike CEO Jack Maller did well to articulate the problem here.
“Ripple is actively lobbying to stop a Bitcoin Strategic Reserve in the U.S. while pushing their centralized, corporate-controlled token,” he said last week. “Why should the U.S. government back a privately owned currency? This is corporate lobbying disguised as innovation.
Thankfully, decisions surrounding a “digital asset reserve” don’t solely lie with him. The congresswoman spearheading the actual legislation to establish a reserve remains Senator Cynthia Lummis of Wyoming, and she remains laser-focused on BTC.
State level legislation to establish smaller Bitcoin reserves are also remaining BTC-oriented. To the degree they use crypto ‘inclusive’ language, Dennis Porter – CEO of Satoshi Action Fund – says its just politically pragmatic language. He claims it reduces political friction, takes a tech neutral approach, protects long term viability, and allows the conversation on “why bitcoin” to actually take place.
“Tech neutral language such as ‘digital assets’ is a proven and effective way to get to the end goal of making the USA the largest holder of Bitcoin in the world,” he said.
Banks Can Actually Hold Bitcoin Now
Aside from the EO, Trump’s newly appointed SEC leader made waves this week after the agency introduced Staff Accounting Bulletin (SAB) 122. This bulletin repeals SAB 121, previously imposed stringent accounting practices on banks and financial institutions regarding bitcoin custody, treating it as a liability on their balance sheet, which significantly increased operational costs and complexities for providing bitcoin services
With SAB 122, it is economically viable for traditional financial institutions to engage with Bitcoin.
Federal Reserve chairman Jerome Powell confirmed the news during a press conference Wednesday, stating that “Banks can freely serve crypto customers.”
MicroStrategy founder Michael Saylor has long stressed that repealing SAB 121 would be key to turbocharging Bitcoin’s growth on the regulatory level. “If the banks can hold this stuff on their balance sheet, then a whole new class of investors is gonna buy it,” he said during an X Spaces in 2022.
Czech Republic Central Bank Wants Bitcoin?
Governor Aleš Michl of the Czech National Bank (CNB) has proposed adding bitcoin to the country’s foreign exchange reserves, potentially up to 5% of its €140 billion reserves, which would make the CNB the first Western central bank to hold cryptocurrency officially.
This, again, confirms a Saylor prediction: central banks will race to print money to buy BTC, and the first ones to do so will win.
Not all central bankers are fans yet, of course. European Central Bank chairman Christine Lagarde dismissed the notion that the ECB will ever accept Bitcoin.
“Reserves have to be liquid, secure, safe… they should not be part of any suspicion of money laundering or any suspicious activity. Therefore, I am very confident that bitcoin will not enter the reserves any of the central banks of the general council,” she said Thursday.
Oh well. Guess the ECB is going to fall behind!
Stay humble,
Andrew
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