Bitcoin: Trump Courts Crypto Voters

By Medha Singh and Lisa Pauline Mattackal

(Reuters) – “Never sell your bitcoin,” Donald Trump declared to a cheering crowd during a crypto convention in Nashville, Tennessee, in late July.

The Republican presidential candidate’s speech aimed to attract crypto-focused voters ahead of the November election and included campaign promises such as establishing a state bitcoin reserve.

Trump stated, “If elected, it will be the policy of my administration to keep 100% of all the bitcoin the U.S. government currently holds or acquires in the future,” asserting that these funds would form the “core of the strategic national bitcoin stockpile.”

Trump is not alone in proposing government bitcoin purchases. U.S. Senator Cynthia Lummis has introduced legislation advocating for the U.S. government to acquire one million bitcoins—around 5% of the total supply. Independent candidate Robert F. Kennedy Jr. suggested a government stockpile of four million bitcoins.

The U.S. government currently holds approximately $11.1 billion worth of crypto, including 203,239 bitcoin tokens, predominantly from criminal seizures related to the online marketplace Silk Road, which was shut down in 2013. Presently, the U.S. holds about 1% of the world’s total bitcoin supply, which is approximately 19.7 million tokens, with the total capped at 21 million coins.

For context, Michael Saylor’s Microstrategy holds around 226,500 bitcoin tokens, while BlackRock’s iShares Bitcoin Trust and Grayscale Bitcoin Trust hold 344,070 and 240,140 tokens, respectively.

A government bitcoin stockpile could potentially bolster bitcoin’s price. Mark Connors, head of global macro at Onramp Bitcoin, stated, “It would have a positive impact on price… assume a new state of a reserve asset.”

However, reserving a significant amount of bitcoin could limit trading tokens and expose investors to risks if the government sells part of its reserves. Connors cautioned against having RFK’s proposed 19% of bitcoin, equating it to gold supply, stating, “I can’t imagine a single bitcoiner would be happy about that.”

Other governments also hold substantial bitcoin, with China reported as the second largest government holder, possessing 190,000 coins.

‘A LOT TO FIGURE OUT’

While the feasibility of a national bitcoin reserve remains uncertain, discussions about its management are ongoing. Suggestions include having the Federal Reserve oversee the reserves for the Treasury Department, similar to gold management, or treating it like the Strategic Petroleum Reserve.

Frank Kelly, senior political strategist at DWS Group, remarked, “There’s a lot to parse and figure out there.”

There is also an irony that contrasts with true bitcoin advocates: a decentralized digital asset potentially becoming part of a state reserve.

Irrespective of a potential bitcoin stockpile, industry watchers are encouraged by the increasing attention digital assets are receiving in political campaigns. Raoul Mewawalla, CEO of Mawson Infrastructure Group, noted, “There’s a general view in the industry that both parties are paying much more attention to digital assets. The expectation is that will continue post-November.”