Last weekend, a rumor that Trump would announce BTC as a strategic reserve asset for the United States at the Bitcoin 2024 conference spread widely, and with Bitcoin quickly returning to $68,000, the market sentiment has also risen a lot. Everyone is looking forward to the "crypto president" to go crazy again at the Bitcoin conference this weekend.

What are national strategic reserve assets

National strategic reserve assets refer to assets held by a country to cope with economic uncertainty, external shocks or other emergencies. These assets usually include traditional safe-haven assets such as gold, foreign exchange reserves represented by the US dollar, euro, and yen, reserve assets such as special drawing rights (SDRs) allocated by the International Monetary Fund (IMF), and government bonds, foreign currency-denominated deposits, and other highly liquid assets.

The composition and management of reserve assets play a vital role in a country's economic stability and its relationship with international financial institutions such as the IMF.

Satoshi Action Fund co-founder Dennis Porter, who is also a participant in the Bitcoin Conference, posted on social media saying that the most likely direction for Bitcoin to become a strategic reserve asset in the United States is to become the U.S. Treasury's Exchange Stabilization Fund (ESF).

The ESF fund is a special fund operated by the U.S. Treasury established under the Gold Reserve Act of 1934, with the main goal of stabilizing the value of the U.S. dollar. The ESF provides the Treasury with tools to conduct currency and gold operations to influence exchange rates and promote stability in the foreign exchange market. Today, Bitcoin is generally regarded as a foreign currency in the United States.

10x Research researcher Markus analyzed that the US government currently holds about 212,847 bitcoins, worth about $15 billion. In contrast, its total gold reserves are about 261.5 million troy ounces, worth about $600 billion. If Bitcoin holdings double ($15 billion), it is almost equivalent to the net inflow of funds into Bitcoin spot ETFs from the beginning of the year to date ($16 billion), which will undoubtedly be more influential in terms of signaling effect.

On July 25, Republican Senator Cynthia Lummis of Wyoming, who supports cryptocurrency, is planning to announce Bitcoin strategic reserve legislation at the Bitcoin Conference. Although the specific content of the bill is unclear, according to a person who has seen the first draft, the purpose of the bill is to instruct the Federal Reserve to purchase Bitcoin and hold it as a reserve asset, just as the US central bank holds gold and foreign currencies, to help manage the US monetary system and keep the value of the dollar stable.

Lummis hinted at a major announcement on her X account: "Big things are coming this week, stay tuned"

Asset manager Bryan Courchesne also recently appeared on CNBC to discuss the potential of Bitcoin to become a strategic reserve asset for the U.S. government under a future Trump administration. According to the asset manager, adopting Bitcoin as a reserve asset would be difficult, but not impossible. Courchesne pointed out that the U.S. Department of Justice holds 200,000 Bitcoins, making the U.S. government the largest holder of Bitcoin, second only to the anonymous creator Satoshi Nakamoto. The Department of Justice could simply transfer the Bitcoin to the U.S. Treasury, paving the way for the Treasury to begin accumulating and holding this scarce asset for the long term.

If Trump really announces at the convention that Bitcoin will be a national strategic reserve asset in the future, what impact will it have on Bitcoin and the crypto industry?

If this comes true, it will be comparable to real gold

The first thing to be affected is the price. As one of the world's largest economies, the policy changes of the United States have a huge impact on the global financial market. The news that Bitcoin has become a strategic reserve asset will trigger a strong reaction in the market, and investors' demand for Bitcoin will increase sharply, pushing up its price.

This will also greatly enhance its mainstream recognition. Other countries and institutions may follow the footsteps of the United States and include Bitcoin in their reserve assets, thereby further consolidating Bitcoin's position in the global financial system. As more countries and institutions use Bitcoin as a reserve asset, its nature determines that its holders tend to hold it for a long time, and the volatility of the Bitcoin market may be reduced.

But before that, we need to realize that it is not up to one person to decide whether an asset can become a strategic reserve asset of a country. Even if Trump is really elected as the new president, he cannot make Bitcoin a strategic reserve asset by himself. This process will involve extensive deliberations by policymakers, economists, and financial experts, and will require approval from Congress and coordination with the Federal Reserve and the Treasury Department.

When all this is settled, the United States may develop and implement clearer and stricter cryptocurrency regulatory policies in order to protect and manage its strategic reserve assets. These policies may have a far-reaching impact on the entire cryptocurrency market, prompting other countries to strengthen their regulation of cryptocurrencies as well.

As the importance of Bitcoin increases, the related infrastructure and technology will also be further developed. This includes more secure storage solutions, more efficient trading systems, and more complete legal and regulatory frameworks.

Bitcoin's role as a strategic reserve asset may change the structure of existing financial markets. The title of "digital gold" will challenge the status of traditional assets (such as gold and treasury bonds) in reserve assets, and the diversity of investment portfolios and risk management strategies will also change.

No matter what the final result is, the crypto industry has undoubtedly entered a more mainstream social vision through politics. As the Bitcoin Conference officially opens, BlockBeats will also send frontline reporters to report on the spot and provide live broadcasts. Readers can follow the BlockBeats video account to track it.

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