30s Summary

Donald Trump’s promise to stop selling seized Bitcoin may require Congressional aid to establish a strategic Bitcoin reserve. Such a process would involve coordination between various governmental agencies, and possibly an act of Congress. Concurrently, Senator Cynthia Lummis proposes selling a proportion of the US’ gold reserves to acquire 1 million Bitcoin, a move that would need at least a $90 billion investment. Bitcoin Policy Institute’s Zack Shapiro suggests the Treasury could use the Exchange Stabilization Fund to buy Bitcoin without Congressional approval. The likelihood of the US government holding Bitcoin reserves by April 2025 stands at 30% according to Polymarket bettors.

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Remember when Donald Trump, while he was still a candidate, promised to stop selling seized bitcoin back in July? Well, now experts are telling us that as incoming president, he might need some help from Congress to set up a proper strategic reserve for Bitcoin. While Republicans will soon have control of Congress, it doesn’t look like starting a bitcoin reserve will be at the top of their to-do list.

So, what’s the plan exactly? Will the U.S. government stop selling the bitcoin in its possession, as Trump promised? Or will it actively buy bitcoin, as Senator Cynthia Lummis and Trump supporter Robert F. Kennedy hope? Currently, the government holds 208,109 Bitcoin—worth over $19 billion. This huge stash was acquired over time through confiscations related to criminal activities. In the past, the government has sold off this seized bitcoin in auctions. However, Trump announced in July that under his rule, the government would keep 100% of all the bitcoin it currently has or gains in the future.

Seems simple enough, right? Well, actually the process of implementing this is not so straightforward. There isn’t an established method for this, and it would probably involve coordinating with various government agencies like the Department of Justice, the U.S. Marshals Service, and the U.S. Treasury.

Furthermore, if Trump’s plan is to move the seized bitcoin from the Department of Justice to the Treasury to start a strategic Bitcoin stockpile, this might need an act of Congress. But according to Moish Peltz, a partner at Falcon, Rappaport and Berkman, the rules around seized Bitcoin might change depending on the department and how the Bitcoin was originally seized.

Speaking of buying bitcoin, Senator Lummis has proposed a more proactive approach in a new bill. She suggests that the U.S. should sell off a portion of its gold reserves and buy 1 million bitcoin. If this were to happen, the government would need to spend a minimum of $90 billion, assuming current prices.

However, implementing such substantial financial commitments usually requires an act of Congress to allocate the funds and create a legal framework. It’s uncertain how much can be done just using Trump’s executive powers.

So, the question remains: Could there be a loophole that allows the government to buy Bitcoin without the approval of Congress? Possibly. Zack Shapiro, head of policy at the Bitcoin Policy Institute, argued that the Treasury has the authority to acquire Bitcoin through the Exchange Stabilization Fund (ESF) by purchasing Bitcoin-denominated debt instruments.

Significant debates and discussions are still on-going regarding this matter. As of now, bettors on Polymarket are estimating 30% odds for the government to hold bitcoin reserves between January and April 2025. Let’s wait and see what happens!