Since the election of President Trump, the cryptocurrency market has been rising day by day, with BTC even breaking through $90,000 at one point. The market is anticipating a more crypto-friendly regulatory environment under the Trump administration, as well as the realization of the vision of incorporating BTC into the US strategic reserve assets.
Saylor: The US Will Establish a Strategic BTC Reserve
In this regard, BTC stalwart Michael Saylor said at a crypto event in Miami on Thursday that the idea of the US government purchasing strategic reserve assets is not new, and the government has taken many such measures in the past. He recalled a series of major land acquisitions by the US in the 19th century, such as Manhattan, Louisiana, California, and Alaska, which brought trillions of dollars in revenue to the US.
Saylor also mentioned that strategic purchases of assets like gold, oil, grains, and helium have also occurred multiple times in the country's history. He stated:
This has been done before, it's a very simple idea: figure out where value is going to be, and then buy it at a low price and hold it. You're a country, that's what countries do.
Saylor further emphasized:
BTC is the manifest destiny of America. I think the Trump administration understands that, and I think Senator Lummis understands that... That's why it's going to happen.
In summary, Saylor believes the US should establish a strategic BTC reserve. He stated that the most effective way to protect the US dollar is to pay off national debt and accumulate wealth. Secondly, the second-best way to protect the US dollar is to ensure you hold any capital asset that could potentially replace Treasury bonds, and that asset is BTC.
Note: In 19th century America, "Manifest Destiny" was a belief that the US had a divine right to expand its territory across the North American continent. This concept was first proposed in the 1840s, claiming that the US was divinely appointed to extend its land and influence to the western regions of the continent. This idea was used to justify the US's territorial expansion, including into Mexican territories, and became an important ideological foundation for the Westward Expansion movement.
Optimistic that the Bill to Purchase 1 Million BTC Will Pass
Furthermore, Saylor also believes that Senator Cynthia Lummis's proposal for the US Treasury to purchase 1 million BTC within five years will pass, as the Republicans will control both the Senate and the House next year. He stated that if this bill becomes a reality, it will be "the greatest trade of the 21st century", and predicted that the US could reap economic benefits of up to $16 trillion from this action.
Saylor also described a "Trump Max" scenario, where the country would purchase 4 million BTC. He believes this could create an economic return of up to $81 trillion, and stated that the Trump Max strategy is a rational choice.
Sell Gold to Buy BTC
As for the source of funding for the purchase of 1 million BTC, according to a Bloomberg report, Lummis said there is a plan to buy BTC without increasing the government deficit, which is to sell some of the Federal Reserve's gold. She stated:
We have gold certificates as financial assets that we can convert into BTC. So, this would be fairly neutral in terms of the impact on the US balance sheet.
According to Lummis's bill, the BTC will be held for at least 20 years, and the assumption is that its appreciation will help reduce US national debt. At current market prices, these purchases would cost around $90 billion, but if the bill is passed and investors get ahead of the government, this amount could increase.
Whether the US's strategic BTC reserve plan will ultimately be approved remains to be seen.
Further Reading: A Bill to Have the US Buy 1 Million BTC in 5 Years Has Been Introduced - Where Will the Funds Come From?
Paradigm Co-founder: The BTC Reserve Race Has Begun
Commenting on this, Matt Huang, co-founder of the crypto venture capital firm Paradigm, said the game-theoretic equilibrium of BTC adoption has shifted:
Sovereign nations can no longer ignore BTC. From a game-theoretic perspective, BTC is like gunpowder, not an iPhone. Just as film director Christopher Nolan can choose not to use an iPhone, but once gunpowder is invented, every nation must adopt it to remain competitive. Similarly, key technologies like AI and drones are also like this.
Matt Huang emphasized that the window for the US to adopt BTC has now opened, and other sovereign nations will no longer wait. The countries that establish BTC reserves early will benefit from the lower entry prices. He concluded that the race to establish BTC reserves has begun.
Bitcoin for the Sovereign pic.twitter.com/HD1UpcD6J7
— Matt Huang (@matthuang) November 14, 2024
