Author: Alex Xu
Crypto and AI czar David Sacks just released a tweet stating that Trump has signed an executive order to establish a Strategic Bit Reserve, with the main points being:
The reserve will be based on existing Bit controlled by the federal government, and Bit forfeited in the future will also enter the reserve.
These Bit will not be sold (at least during Trump's term)
The government will not set up a separate budget (i.e. "budget-neutral" in the original text) to purchase Bit
Trump has fulfilled his promise
How to understand the above news? I think the main points are as follows:
1. This "Strategic Bit Reserve" is not the same as the "Strategic Federal Reserve" Bit bill that Senator Cythia Lummis is pushing for at the federal level. The former can be directly controlled by the government, while the latter requires congressional legislation; the former also does not have a separate budget for purchasing Bit (if an increase is needed, it requires congressional approval), while the latter will provide a separate budget for purchasing Bit, with the goal of the bill being to buy 1 million Bit in 5 years, with the source of the budget possibly coming from a revaluation of the value of the US's existing gold reserves, thereby expanding the Fed's asset count to provide a budget for the Treasury to purchase Bit. David Sacks' statement that "the government will not acquire other assets for the reserve" does not mean that the widely perceived Bit strategic reserve has suddenly become something that relies solely on forfeiture and does not spend money to purchase Bit.
2. Can the above executive order be said to fulfill Trump's "promise"? At the executive level, yes. Because at the executive level, Trump's ability to do is limited, and what he said during the campaign, such as establishing a Bit strategic reserve (at the executive level), setting up a dedicated crypto advisory board, firing/forcing out former SEC chairman Gensler, and relaxing industry regulations, have basically all been done. But at the overall level, the promise has not been fully fulfilled, as Trump clearly stated during the campaign that he would also build a federal strategic reserve (Strategic Federal Reserve) to purchase more Bit, which is also the content of the bill that Senator Cythia Lummis is pushing for in Congress.
3. Will Trump announce more positive news about Bit reserves or other things? It's possible, as he is the keynote speaker at the White House crypto summit to be held tomorrow morning Beijing time. But as mentioned earlier, at the executive level, there is not much he can do for Bit, and the most extreme measure is to order the Treasury to directly use the Exchange Stabilization Fund to purchase Bit, which is an existing fund and does not require additional congressional approval, with the goal of the fund being to "stabilize the US dollar exchange rate". But as I mentioned in my previous article "A Brief Analysis of Trump's Promotion of SOL XRP ADA National Reserves", Trump's style is to like to play big with small moves, to make big news with low-cost small measures, and he is not willing to put in a lot of effort and break through major obstacles for things that have no big payoff and only high risk. Although using the Exchange Stabilization Fund to purchase Bit is theoretically within his executive power, this real action is too extreme, and the subsequent troubles will be many, and it may also interfere with Senator Cythia Lummis' efforts to push the bill in Congress (the two actions overlap).
4. What we need to pay attention to is that Trump's "madman persona" has become more prominent since he took office, with his external performance being reckless and hoping to make foreign diplomatic opponents feel that he is a madman who dares to do anything, in order to gain political benefits through coercion; internally, he is constantly trying to expand the boundaries of presidential power through various executive actions, including but not limited to mass layoffs and forced government employee shutdowns through DOGE, and withholding congressional-approved government budgets, etc. He is putting the "unitary president" line into practice, with a highly obedient cabinet team supporting him on the one hand, and the Supreme Court's ruling in July last year that the president has "absolute immunity from criminal prosecution when acting in the public interest" giving him more confidence on the other. So it's also possible that Trump may change his tune and make more exaggerated positive promises in the face of a large backlash from the crypto community, but the likelihood of implementation is still doubtful.
5. The trend of Bit entering national finances is still slowly progressing despite the obstacles. The key focus remains the advancement of the formal Federal Reserve Act and the advancement of state-level Bit reserve bills. See "Web3 Investment Memo on 2.26, and Key Progress on Bit Reserve Bills" for details.
