Author: Mu Mu, Bai Hua Blockchain
Since the "definitive" victory of Trump in the election in early November, the cryptocurrency market, especially Bitcoin, has entered a strong "US Bitcoin Strategic Reserve" expectation. Clearly, the market will focus highly on the implementation of this commitment after Trump takes office in 2025, and some analysts have directly stated that this matter will break the Bitcoin bull-bear cycle, which means that any "incident" in the future may lead to violent market fluctuations. What we can do now is to pay attention to its progress dynamics, estimate the possible landing time points in advance, and make corresponding preparations.
01 Latest Progress
The "Bitcoin Strategic Reserve" issue actually had relevant proposals and discussions before the US presidential election. Senator Cynthia Lummis proposed the "BITCOIN Act of 2024" as early as July 31, 2024, which proposed to purchase 200,000 Bitcoins per year, reaching 1 million Bitcoins in five years.
Subsequently, during the campaign, Trump promised to become the "Cryptocurrency President" in a speech at a Bitcoin conference in the crypto industry, and the industry hopes that he will fulfill his promise by issuing an executive order to create a Bitcoin reserve, ensure that the industry can obtain banking services, and create a Cryptocurrency Commission.
On December 17, 2024, the Bitcoin Policy Institute (BPI) (note that it is not an official organization, but a non-profit organization focused on Bitcoin policy research, but it is still an important think tank for policymakers on Bitcoin-related issues) recently released a draft executive order, trying to provide reference opinions for the framework of Trump's "Bitcoin Strategic Reserve" executive order. This draft clearly proposes: It is recommended to use 1%-5% of the national debt assets to purchase Bitcoins to form a long-term reserve. Led by the Treasury Department, with the cooperation of the Federal Reserve, to gradually build up the reserve.
On December 19, 2024, Federal Reserve Chairman Powell (expected to continue his term after Trump takes office) expressed a cautious view at a press conference, saying that the Federal Reserve has no intention of participating in any government plan to hoard Bitcoins, and that such issues are the responsibility of Congress, and the Federal Reserve has not sought to change existing laws to allow holding Bitcoins.
From the latest situation, although the Federal Reserve chairman holds a conservative view, under the favorable conditions of a crypto-friendly US Treasury Secretary nominated by Trump and the "Presidential Executive Order" issued shortly after taking office, these will not affect Trump's team's continued efforts to include Bitcoin in the US strategic reserve.
02 Fastest Landing Time
Given that the "Bitcoin Strategic Reserve" is not a small issue, it is not something that the US President can immediately implement on a whim, so we will not see its implementation immediately. From the current administrative order or legislative process in the country, if Trump wants to implement the Bitcoin Strategic Reserve, after taking office, he will immediately have the Cryptocurrency Commission conduct policy research and feasibility assessment, and after completion, formally propose a plan, which can then be carried out through two paths:
Path One: Presidential Executive Order (Fastest in the second half of 2025)
Trump issuing an executive order after taking office is the fastest path, as it can bypass the resistance from the Federal Reserve and Congress. It can also refer to the draft provided by the "Bitcoin Policy Institute" to instruct the US Treasury Department to directly allocate Bitcoins using the Exchange Stabilization Fund (ESF).
However, this method, although fast and convenient, also has side effects. The Treasury Department's Exchange Stabilization Fund can be used without Congressional approval, but it can also be investigated by Congress and legislatively restricted. Executive orders can also be overturned and modified by the next president, so their durability and stability are not as good as legislation.
Path Two: Congressional Legislation (Fastest in the second half of 2026)
If the more stable legislative path is taken, a longer process is required. After the Cryptocurrency Commission conducts policy research and feasibility assessment, the 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 enacted.
This process may experience various back-and-forth struggles and is relatively complex, as many conservative lawmakers will certainly raise objections and obstruct it. Therefore, although this path can obtain a durable and stable law, it will take a long time, at least until the second half of 2026 or 2027 before it can be implemented.
Recent news indicates that the crypto industry is pushing Trump's team to issue an executive order on the first day of his next month's inauguration, to launch the crypto policy reforms he has promised, and to help promote the mainstream adoption of cryptocurrencies. If an executive order is issued, the Bitcoin Strategic Reserve may be implemented as early as the middle of 2025.
03 Several Important Time Points
During the "due process" of the relevant executive order or bill on the Bitcoin Strategic Reserve, the following time points may have a significant impact on the market:
1) January 20, 2025, around the inauguration ceremony
Trump will be officially sworn in on this day, and from this time on, he will be able to officially "issue orders". This time point will mark the beginning of the new president's administration, and relevant policy developments may gradually emerge. The market will pay close attention to the inauguration speech and the issuance of early executive orders. Many guests are expected to be invited to this inauguration ceremony, which will also attract high attention from the financial markets.
2) Mid-2025, completion of the policy research phase
According to the timeline, the Cryptocurrency Commission's policy research is expected to be completed in the first half or middle of 2025, and a feasibility report and draft on the Bitcoin reserve will be proposed. Trump can then sign the executive order, marking the official launch of the "Bitcoin Strategic Reserve".
3) Second half of 2025 to early 2026, implementation details and potential Congressional tug-of-war
After signing the relevant executive order and confirming the framework, the US Treasury Department, the Federal Reserve, and other relevant departments will need to start working on the specific implementation details, including the Bitcoin procurement method, reserve ratio, asset management rules, and then begin formal implementation.
During this period, it is unlikely to be too smooth, as opposing lawmakers in Congress will join the obstructionist ranks and engage in repeated tug-of-war.
Finally, if everything goes well and the Bitcoin reserve strategy brings objective "benefits", future legislation may be further promoted, which will have a profound impact on the crypto market landscape.
04 Summary
The road to the "Bitcoin Strategic Reserve" seems full of twists and turns, and it is not something that can be implemented in a day or two, at the earliest it will be at least half a year from now. But regardless, Trump's "US Bitcoin Strategic Reserve" has brought good expectations, and has also "set a template" to drive central banks, financial institutions, and listed companies to research and explore the feasibility of Bitcoin reserves. Although the policy details and the final implementation time may still have many uncertainties, we still need to follow up and pay attention to the key time points, and make timely adjustments.
