U.S. Crypto Task Force Explores National Bitcoin Reserve
The newly formed U.S. crypto task force is set to explore the establishment of a national bitcoin (BTC) reserve, a strategic initiative that could ignite similar movements across the globe, according to a research report released by broker Bernstein on Monday. The analysts, led by Gautam Chhugani, highlighted that, “the creation of a U.S. bitcoin reserve could trigger a worldwide competition among sovereign nations to acquire bitcoin as a reserve asset.”
The potential formation of such a strategic reserve brings forth a myriad of structural considerations. Key questions arise: Will the U.S. Federal Reserve or the Treasury be responsible for purchasing bitcoin? The report suggests that if the Federal Reserve takes on this role, it would necessitate legislative approval. Furthermore, the mechanics of funding these cryptocurrency acquisitions remain uncertain. Bernstein speculates that the Fed might finance these purchases by issuing new debt or liquidating portions of its gold reserves.
Additionally, the U.S. government could incorporate the estimated $20 billion in bitcoin it has confiscated from various criminal enterprises into this national reserve, thereby augmenting its holdings significantly. The report also draws attention to the fact that during the Trump administration, there were discussions about establishing a sovereign wealth fund (SWF). This fund, according to Bernstein, “would consider prominent U.S. crypto companies and market leaders as strategic assets to acquire.”
In light of these developments, Bernstein advises investors to proactively position themselves for what they believe could be the next significant phase of the bull market, particularly in bitcoin and bitcoin-related equities.
