Trump's bitcoin reserve to be a 'digital Fort Knox'
Trump earlier this month signed an executive order establishing the reserve, which White House crypto chief David Sacks has likened to "a digital Fort Knox," comparing it to the stockpiling of gold bars at the U.S. military base.
Gold is held in reserves by countries worldwide as the metal is seen as a safe-haven asset, protecting against financial instability such as high inflation.
The metal on Friday surpassed $3,000 per ounce for the first time, boosted by an uncertain economic outlook amid Trump's tariffs.
Gold reserves can help also stabilize a country's currency, while bars are used as collateral for loans and transactions.
How will U.S. bitcoin reserve work?
It is to be funded by about 200,000 bitcoins, worth around $17 billion in total, that have been seized in the United States as a result of civil and criminal cases.
The reserve will be virtually secured for an indefinite time.
Additional bitcoin can be added to the reserve as long as such action is "budget-neutral," thus not costing the taxpayer.
Announcement fails to impress
The price of bitcoin initially slid after Trump signed the executive order but has since stabilized.
Analysts have blamed the lack of support on a failure to immediately buy more bitcoin.
Dessislava Aubert, an analyst at crypto data provider Kaiko, said that "legally," the U.S. government must return bitcoin to all victims identified as suffering from a hack.
According to Aubert, "a big chunk" of the bitcoin held by the United States — estimated at around 198,000 tokens — would have to be returned to victims of a hack at crypto exchange Bitfinex in 2016.
Sector watchers are also waiting to see if other digital tokens will be added to the reserve, which is possible according to the executive order.
Trump has said that bitcoin's nearest rival, ether, along with three other tokens — XRP, Solana and Cardano — could be added.
Reason to copy gold reserve?
Critics of the U.S. bitcoin reserve point out that, unlike gold, cryptocurrencies are risky assets and have no intrinsic value.
However, Sacks believes that by storing bitcoin over time, the government would protect itself from the cryptocurrency's massive short-term volatility.
Meanwhile, Stephane Ifrah, an investment director at crypto platform Coinhouse, said that bitcoin, like gold, can profit from its rarity thanks to a limited 21 million tokens.
An advantage of the bitcoin reserve is its transparency, since the level of tokens will be known at all times — unlike the amount of gold placed in Fort Knox.
Additionally, with the bitcoin reserve, "we're dealing with a rare asset that's much more suited to today's world," Ifrah said.
Prominent cryptocurrency critic, Molly White, believes the "true reason" for the reserve "is a way to drive interest in the crypto industry," which could financially benefit investors.
Trump has been accused by some of showing a conflict of interest, having vowed ahead of being elected to make the United States the "bitcoin and cryptocurrency capital of the world."
The Financial Times reported that Trump earned $350 million from launching a meme coin, $TRUMP, to coincide with his inauguration.
The Wall Street Journal has reported that the Trump family discussed acquiring a possible stake in the Binance platform — a report denied by the crypto exchange's founder.
Other countries' plans
Brazil is also considering the creation of a cryptocurrency reserve, an idea recently ruled out by the Swiss central bank.
Governments around the world are partaking in cryptocurrency activity, notably by selling digital assets seized in court cases, as was the case in Germany last year with 50,000 bitcoins.
El Salvador made bitcoin one of its official currencies, reversing the decision this year owing to a lack of take-up by citizens.
Bhutan holds nearly $900 million worth of bitcoin, equivalent to nearly 30% of the kingdom's gross domestic product.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Japan Times
an hour ago
- Japan Times
Trump approval holds at 40%, lowest level of his term, poll finds
U.S. President Donald Trump's approval rating held at 40% in recent weeks, matching the lowest level of his current term, amid weak ratings from Hispanic voters, according to a Reuters/Ipsos poll that closed on Monday. The six-day poll was conducted as economic data showed signs the U.S. labor market is weakening and as Trump oversees a sweeping immigration crackdown, while at the same time the Republican has been engaged in intense diplomacy to end a war between Russia and Ukraine. Trump's approval rating was unchanged from a late July Reuters/Ipsos poll, but has dropped 7 percentage points since his first days back in the White House in January, when 47% of Americans gave him a thumbs-up. The latest poll showed Hispanics, a group that swung toward Trump in last year's election, have also soured on the president. Some 32% approved of his performance in the White House, matching their lowest level of approval for Trump this year. More than half of respondents — 54%, including 1 in 5 Republicans — said they thought Trump was too closely aligned with Russia, even as he ramped up a push to broker peace between Moscow and Kyiv. Trump has appeared to embrace Russia's claim that Ukraine must cede territory to Russia in order for the war to stop. Trump met with Russian President Vladimir Putin in Alaska on Friday, and the poll closed just ahead of the president's meeting on Monday with Ukrainian President Volodymyr Zelenskyy. Just 42% of respondents approved of Trump's performance on crime and 43% thought he was doing a good job on immigration policy. On all policies, Trump's support came overwhelmingly from Republicans. After returning to the White House in January, Trump ordered a sweeping crackdown on people living in the country illegally, deploying masked agents to arrest and deport migrants across the country. The policy has triggered mass protests in cities including Los Angeles, where about half the population identifies as Latino and many people have family members who are recent immigrants. More recently, Trump ordered federal agents and National Guard troops to aid in law enforcement in Washington, D.C., arguing that crime was rampant there. Statistics show that violent crime shot up in 2023 but has been rapidly declining since. The Reuters/Ipsos poll surveyed 4,446 U.S. adults nationwide and online and had a margin of error of about 2 percentage points.
NHK
2 hours ago
- NHK
Trump to set up Zelenskyy and Putin meeting
US President Donald Trump wrapped up meetings in Washington with Ukrainian President Volodymyr Zelenskyy and his European counterparts. He said he will set up a meeting between the Ukrainian and Russian leaders. Trump posted on social media at the end of the meetings at the White House, saying, "I called President Putin, and began arrangements for a meeting, at a location to be determined, between President Putin and President Zelenskyy." Trump also said they will then hold a trilateral meeting. Trump also commented on the talks with the European leaders and Zelenskyy. He said, "We discussed Security Guarantees for Ukraine, which Guarantees would be provided by the various European Countries, with a coordination with the United States of America." It was Zelenskyy's first visit to the Oval Office since their February meeting, which devolved into a heated argument. Monday's meetings came on the heels of Trump's Alaska summit with Russian President Vladimir Putin on Friday. Soon after he met with Zelenskyy, they both were joined by European leaders. Trump commented on the security guarantees at the outset of the wider meeting. He said the European nations would take a lot of burden, and the US would help make Ukraine very secure. The president also said Putin had agreed that Russia would accept security guarantees. Zelenskyy emphasized he was ready to discuss all the sensitive issues, including territory.
Nikkei Asia
3 hours ago
- Nikkei Asia
US trade team 'postpones' India visit after Trump and Putin meet in Alaska
The Port of Los Angeles in San Pedro, California: India could be facing some of the highest U.S. tariffs if it is penalized for trading with Russia. © Reuters KIRAN SHARMA August 19, 2025 19:28 JST NEW DELHI -- With strained India-U.S. ties over President Donald Trump's steep tariffs, an American delegation's planned visit to New Delhi in late August for trade negotiations has been "postponed."
