Trump Ally Proposes Selling Gold to Buy Bitcoin, Could the US Build a Crypto Reserve?

Trump Ally Proposes Selling Gold to Buy Bitcoin, Could the US Build a Crypto Reserve?Republican Senator Cynthia Lummis from Wyoming plans to push a proposal named the BITCOIN Act in the next Congress, which would require the US government to purchase 1 million Bitcoins, representing nearly 5% of the cryptocurrency's circulating supply. This proposal has sparked widespread discussion, becoming a prominent issue in American politics

Trump Ally Proposes Selling Gold to Buy Bitcoin, Could the US Build a Crypto Reserve?

Republican Senator Cynthia Lummis from Wyoming plans to push a proposal named the BITCOIN Act in the next Congress, which would require the US government to purchase 1 million Bitcoins, representing nearly 5% of the cryptocurrency's circulating supply. This proposal has sparked widespread discussion, becoming a prominent issue in American politics.

According to current market prices, buying 1 million Bitcoins would cost approximately $90 billion. Lummis mentioned in media interviews that the Federal Reserve has a significant amount of gold reserves on its balance sheet, suggesting selling some of it to fund Bitcoin acquisition. She believes this would have a "neutral" impact on the US balance sheet.

The Federal Reserve's balance sheet lists the gold certificates held by the Treasury Department, nominally valued at around $11 billion. However, this value is calculated based on the "legal price" that has been maintained since 1973, at a mere $42.2222 per ounce. Using the current real spot price, the actual value of these gold holdings reaches a staggering $675 billion. Theoretically, the Federal Reserve's gold reserves could cover the purchase of 1 million Bitcoins and still have a substantial surplus.

Lummis' proposal requires congressional approval to be implemented. While the next Congress is expected to see a rise in Bitcoin-supportive lawmakers, there are currently no other co-sponsors for this bill. Therefore, the success of its passage remains uncertain. Data from the cryptocurrency prediction platform Polymarket shows that the probability of Trump establishing a Bitcoin reserve during his presidency stands at a mere 31%.

Trump has repeatedly expressed his support for cryptocurrencies, particularly Bitcoin. At the Bitcoin 2024 conference held on July 28th, he stated that if he were to return to the White House, he would ensure the government maintains 100% of its Bitcoin holdings and make it a US strategic reserve asset. He also pledged to reduce the prison sentence of Ross Ulbricht, the founder of the Silk Road darknet market, and encourage power plants to enhance their power supply for Bitcoin mining.

Trump's statements ignited discussions within the crypto community, with many believing it would be the most crypto-friendly presidency in history. However, it's crucial to note that many of Trump's promises have yet to be fulfilled, and whether he can truly deliver on them remains to be seen.

Both Lummis' proposal and Trump's commitments indicate a shift in the US government's attitude towards cryptocurrencies. Whether America will become a global leader in the crypto space is a question that will be answered in the future.

Further Details from the Article:

• Lummis' Proposal:

• Purchase 1 million Bitcoins, approximately 5% of total circulating supply.

• Fund it by selling part of the Federal Reserve's gold reserves.

• Claims the impact on the US balance sheet would be "neutral."

• Federal Reserve Gold Reserves:

• Nominal value of roughly $11 billion, based on the legal price since 1973.

• Actual value reaches $675 billion based on the current spot price.

• Trump's Promises:

• Designate Bitcoin as a US strategic reserve asset.

• Hold 100% of the government's Bitcoin.

• Reduce Ross Ulbricht's sentence.

• Encourage power plants to bolster power supply for Bitcoin mining.

• Future of the Bill:

• There are no co-sponsors for the proposal currently.

• Polymarket data suggests a 31% probability of Trump establishing a Bitcoin reserve.

• Uncertainty still exists about the future of the US government's approach to cryptocurrencies.

This article incorporates information from Cailian Press, Securities Times, and Huaxia Times.