Trump didn’t live up to RFK Jr’s promise to build a ‘bitcoin Fort Knox’ – here’s why

NASHVILLE – Former President Donald Trump stopped short of his promise to establish the U.S. strategic reserve currency bitcoin during his keynote speech at the biggest event of all time. bitcoin conference of the year.

However, the Republican presidential candidate promised only to maintain the current level of bitcoin holdings that the US has accumulated from seizing assets from financial criminals.

“For too long our government has violated a cardinal rule that every bitcoiner knows by heart: Don’t sell your bitcoins,” Trump said at this year’s Bitcoin Conference in Nashville.

“If I am elected, it will be the policy of my administration, the United States of America, to keep 100% of all bitcoins currently held or acquired by the US government in the future,” he said.

Trump’s strategy to permanently hold onto your bitcoin holdings, through bull and bear markets, is widely supported in crypto circles, though that is not the approach of the current US government.

Currently, the US Marshals Service regularly auctions bitcoins as well as other cryptocurrencies held in the state treasury such as ether and litecoin. Such sales can sometimes lead to a drop in crypto prices, as was the case earlier this month when Germany began to liquidate hundreds of millions of dollars in seized bitcoins.

At a closed-door roundtable he held with a mix of donors before Trump’s remarks on Friday, the former president didn’t talk about the mechanics of the plan, but he said he thought the government would hold bitcoin.

The meeting included investors Tyler and Cameron Winklevoss, musician Kid Rock, Republican Senators Cynthia Lummis, Bill Hagerty and Marsha Blackburn, along with others, according to two people in the room.

Trump’s proposal is less revolutionary than some crypto enthusiasts had expected, and failed to match the distance of another sweep of the third-party presidential candidate Robert F. Kennedy Jr.

“I understand that tomorrow President Trump may announce plans to build a bitcoin Fortress Knox and authorize the US government to buy millions of bitcoins as a strategic reserve asset,” Kennedy said during his Bitcoin Conference speech on Friday.

Kennedy went further than Trump, promising to establish a strategic reserve of 4 million bitcoins to match the country’s current stock of gold, some of which is held near the military base at Fort Knox. The independent presidential candidate says he will sign an executive order directing the U.S. Treasury to buy 550 bitcoins a day, an action that would change the way cryptocurrency is regulated and valued.

As bitcoin became a more prominent issue on the campaign trail, fueled by the growing crypto lobby in Washington, Trump’s reluctance to match Kennedy’s “bitcoin Fort Knox” commitment.

But Trump’s reservations speak to the complications of promising bitcoin’s strategic reserve equivalent to the gold standard.

The Trump campaign did not immediately respond to a request for comment.

In short, no.

The executive order is not enough to create a US bitcoin reserve. The president will need new legislation and congressional approval to implement it. Some lawmakers have already started the process.

Shortly after Trump’s headline speech at the Bitcoin Conference on Friday, Senator Lummis of Wyoming announced his plans to introduce new legislation that would support strategic bitcoin reserves.

“Over five years, the United States will collect 1 million bitcoins, five percent of the world’s supply,” Lummis said. “And that will be held for at least 20 years and can be used for one purpose: Reducing our debt.”

Lummis added that creating reserves like this would help strengthen the dollar against rising inflation.

The US government has accumulated bitcoin assets hauled from financial criminals in high-profile sting operations.

Existing bitcoin reserves could form the basis for a strategic bitcoin reserve, which the US government would build by regularly buying some bitcoins.

Those additional bitcoin purchases will be paid for, at least in part, by US taxpayers.

According to the legislation proposed by Sen. Lummis, which will be introduced in the coming days, the bitcoin reserve will be paid for with “existing funds” from the Treasury Department, which includes tax revenue.

The main goal is to reduce the federal deficit, Lummis said at the Bitcoin Conference, which could offset the initial spending.

Passing legislation to create reserves like Lummis is proposing would require a Republican sweep in November: the White House, Senate and House.

The chances of a red wave like this seem to be increasing in July, as Democrats and Independents have eliminated President Joe Biden.

But with Vice President Kamala Harris at the top of the Democratic ticket, the 2024 election is a whole new ball game.

Bitcoin reserves will give the digital currency a greater level of legitimacy, building on the momentum of Wall Street’s adoption of the digital asset.

In January, spot bitcoin exchange-traded funds went live on the US market for the first time with the blessing of the US Securities and Exchange Commission. Many see the listing as the event that cemented bitcoin’s place as an asset class that is here to stay.

However, the launch of the national reserve would be a surprising promotion for the teenage currency, which was launched in 2009 and since then has been characterized by a volatile performance with short-term winds for investors. Trump himself has been a bitcoin naysayer since 2021 when he called the currency a “fraud.”

In the short term, bitcoin’s new status will send the price of the cryptocurrency soaring.

“If the US government creates a strategic reserve then other countries will, and will pull a lot of bitcoin out of the market,” he said. District Digital MarathonCEO Fred Thiel. “That then drives all prices.”

Currently, bitcoin remains stable around $68,000 as the market rejects Trump’s promises on bitcoin, which is less aggressive than anticipated.