US Strategic Bitcoin Reserve: Is the Government Selling Gold to Finance It?

The discussion about how to finance the newly created Strategic Bitcoin Reserve (SBR) is gaining momentum. According to Geoff Kendrick of Standard Chartered, a budget-neutral option could be to sell parts of the US gold reserves to buy Bitcoin.

This consideration follows President Donald Trump’s directive that all future government Bitcoin purchases must not incur any additional costs for taxpayers.

Gold as a source of financing for the Bitcoin reserve

The US government holds gold reserves worth about $760 billion. Kendrick proposes selling some of these holdings to purchase Bitcoin for the SBR. This would represent a significant strategic shift, as gold has traditionally been considered a safe haven for the US economy.

Trump’s executive order stipulates that all Bitcoin already owned by the government will be transferred to the reserve but may not be sold, signaling a long-term stance toward the digital currency.

Other budget-neutral strategies

In addition to selling gold, Kendrick named two other potential financing options:

Use of the Exchange Stabilization Fund (ESF): The ESF has assets of $39 billion and is traditionally used to stabilize financial markets. Repurposing it for Bitcoin purchases would be a radical step and would represent a significant reversal in financial policy.

Bitcoin Act: This bill, proposed by Senator Cynthia Lummis, would allow 200,000 Bitcoin to be purchased annually for five years. If properly designed legally and financially, it could serve as a budget-neutral solution.

The impact on the global market

Kendrick predicts that the formal introduction of a strategic Bitcoin reserve in the U.S. could encourage other nations to take similar measures. As early as the end of 2024, Abu Dhabi had held 4,700 BTC via IBIT, and more countries could follow suit.

In addition, US policy could encourage institutional investors, including pension funds, to consider Bitcoin as a strategic part of their portfolios. This could have a lasting impact on the market and further strengthen the adoption of digital assets.

Outlook – further details on the Bitcoin reserve

Trump is expected to announce further details on the Bitcoin reserve at the Digital Assets Summit. However, Kendrick stresses that short-term measures are unlikely. Treasury Secretary Scott Bessent will play a key role in the concrete implementation.

The question remains: Will the US government really sell gold to finance the US Bitcoin reserve? Or will another budget-neutral solution prevail? The coming weeks are likely to be particularly exciting for crypto investors.

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(Featured image by Alesia Kozik via Pexels)

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