The US Strategic Bitcoin Reserve

Another week in Bitcoin has drawn to a close, and as we’ve become accustomed to, it brought with it yet more outrageous, and at times, completely surreal news.

There were no dramatic changes to Bitcoin of course. In predictable fashion, it kept on producing blocks of transactions every ten minutes, just like it has done for the past 16 years. In many respects Bitcoinis the very epitome of stability.

Instead, the source of all the crazy news this week stemmed rather unsurprisingly from the most chaotic and volatile of all creatures, human beings. And not just any human beings, Bitcoin’s growing global significance has attracted the most unpredictable of beasts. It has now caught the attention of politicians.  

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First, They Ignore You…

Nobody should be upset or surprised by this. It was always inevitable.

At first it was easy for politicians to simply ignore Bitcoin. Most of them probably didn’t even know it existed. What interest would politicians have in a monetary system that they can’t control or influence? That’s their main line of business! They weren’t exactly Satoshi’s ‘target market’.

But this wouldn’t remain the case for long. With each passing year the adoption and value of Bitcoin would grow until it became impossible to ignore. This forced politicians to change tack. Instead of ignoring Bitcoin, they switched to dismissing it as nothing more than a joke or a scam. You might recall that back in 2022 Trump appeared on Fox news to issue the following statement:

“Bitcoin just seems like a scam. I don’t like it because it’s another currency competing against the dollar. I want the dollar to be the currency of the world. That’s what I’ve always said”. – Donald Trump

But just deriding Bitcoin didn’t work either. Over the years it’s been called a scam, a bubble, a ponzi scheme, and even rat poison by some of the world’s most powerful and influential people. But despite this constant FUD, more and more people would adopt Bitcoin, and the network would continue to grow, proving that you can’t stop a good idea just by laughing at it.  

Politicians needed a new tactic. They started directly attacking Bitcoin. The Biden administration was openly hostile and launched initiatives like ‘Operation Chokepoint 2.0’ in an effort to debank Bitcoin businesses and force them out of business.

And alongside these regulatory attacks, prominent Democrats like Senator Elizabeth Warren would constantly spread misinformation trying to convince people that Bitcoin was nothing more than a tool for criminals and terrorists. In a senate hearing she had this to say:

“In their attempt to avoid being traced, illegal actors have adopted ever more sophisticated technologies such as ‘non-custodial’ wallets.”  - Elizabeth Warren

Bitcoin is non-custodial by design. She was essentially calling all Bitcoin users illegal actors. Warren even went as far as trying to raise an ‘army’ to push through her anti-crypto agenda and made it part of her election campaign!

Thankfully, pedalling propaganda, spreading misinformation, and screeching about money laundering did little to slow Bitcoin’s progress. It turns out you can’t stop a protocol based on mathematics and the laws of thermodynamics by screaming at it.

As for the regulatory attacks? Well it’s tricky to apply pressure to an industry by debanking it when the technology it’s based upon was designed to make banks obsolete in the first place. Go figure…

So, politicians have been on quite a journey when it comes to Bitcoin. First, they ignored it, then they ridiculed it, and then they tried to attack it. It puts us in mind of a famous quote commonly misattributed to Mahatma Ghandi:

So have we at long last reached the final stage? Have politicians finally capitulated, accepted the inevitable, and stopped fighting Bitcoin?

Are we now on the brink of ‘winning’?

Well, some people are certainly arguing that’s the case. With the Trump administration now talking about building Strategic Bitcoin Reserves, it looks as though the politicians might finally be jumping on board.

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A ‘Strategic Crypto Reserve’!?

The long awaited ‘Strategic Bitcoin Reserve’ got off to a rather interesting start this week. A post from Trump on Truth Social certainly raised a few eyebrows. A Strategic Crypto Reserve? What!?

Bitcoiners’ reactions to this news were as you might expect. A lot of people assumed it was some sort of hoax. A Strategic Crypto Reserve without even a mention of Bitcoin? It seemed too surreal.

Thankfully things started to make more sense once the President followed up with another post that provided a little more clarity:

But is this what ‘winning’ looks like?

Sure, Bitcoin was mentioned, but the suggestion that the US government would buy, hold or even acknowledge scams like XRP, SOL and ADA is quite concerning!

XRP is 100% pre-mined. In 2012 the private company Ripple Labs created 100 billion XRP tokens out of thin air and there is no mining mechanism. XRP only reaches the open market when Ripple sells them or they ‘distribute it to partners’, and they still hold 42% of the supply! The idea that the US government might consider holding this as any kind of reserve is ludicrous. Somebody call DOGE…

ADA and ETH are no better. ETH, the so-called ‘world computer’, has achieved nothing more than being the perfect platform for scams and ridiculous jpegs, and ADA is practically a ghost chain with little activity and no easily discernible use case.

As for SOL? Well, that’s where the recent meme coin circus all started. If ETH created ‘alt-season’ then SOL is responsible for unabashed ‘crime season’. People use it to launch coins while live streaming taking drugs and 13-year-old kids are rug-pulling people for tens of thousands of dollars. SOL is a degenerate’s paradise.

Some world leaders even got in on the action as well….

Perhaps it’s not so surprising that SOL received at least a tacit endorsement from the President after all.

As you might expect, after these posts from Trump, and the suggestion that the US government might start a ‘Strategic Crypto Reserve’, shitcoiners everywhere were getting quite excited about the US government pumping their bags.

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Wait, Politicians Are Shitcoiners? – Always Have Been!

It’s wild to think that the US Government would lend any credibility to centralised, pre-mined scams, much less consider holding them as part of a strategic reserve.

But the question is, would it really be that surprising?

Anyone who understands Bitcoin deeply enough knows that a world operating on a Bitcoin standard would be a world where the state’s power and influence over our lives is significantly curtailed.

Without the ability to print money to fund whatever mad policy they feel like, Bitcoin forces the state to live within its means, surviving only on any taxes it can collect. Permissionless money will force politicians into having to ask permission from their citizens again. Bitcoin puts the shoe on the other foot.

With that in mind, it’s perhaps naive to expect the state to be quick to embrace a ‘Bitcoin-Only Standard’ immediately. If they’ve taken the time to understand Bitcoin properly, they will have recognised that it has the potential to hugely limit their power and return them to their proper station in life as public servants. Without the ability to create money from thin air, they will have far less ability to dictate every aspect of our lives.

In contrast, ‘crypto’ is much more aligned with the way the state and politicians think. Altcoins aren’t truly decentralised like Bitcoin is. Each of them has a founder that can wield undue influence over the network’s monetary policy and are all heavily pre-mined to benefit insiders.

Insiders with outsized control and influence? That appeals far more to a politician’s predilections. Of course they were going to dabble with ‘crypto’, at least a little.

Trump Announces a Strategic Bitcoin Reserve!

By the end of the week the story had developed further, and on Friday an historic event took place when President Trump signed an Executive Order to establish a Strategic Bitcoin Reserve.

Thankfully, by the time this official announcement was made, a far clearer distinction had been made between Bitcoin and ‘crypto’, and the details of the Executive Order are quite revealing:

The Executive Order first states that it recognises Bitcoin as the original cryptocurrency and that its fixed supply means there is a strategic advantage to holding it. Notably it does not reference any strategic advantage to holding any other cryptocurrencies.

The Executive Order then goes on to draw a clear distinction between the creation of a ‘Strategic Bitcoin Reserve’ containing Bitcoin only,and a separate ‘Digital Asset Stockpile’ responsible for holding the shitcoins referenced in Trump’s Truth Social posts.

What’s particularly interesting is that it also clearly states that any Bitcoin deposited into the Strategic Reserve must not be sold. But it makes no such commitment that any crypto held in the ‘Digital Asset Stockpile’ won’t be.

The Executive Order also states that ‘The Secretary of the Treasury and the Secretary of Commerce will begin developing strategies to acquire additional Bitcoin for the reserve so long as these strategies are ‘budget neutral’ and don’t impose costs on American taxpayers. In stark contrast it clearly states that the US government will not actively acquire any other digital assets other than those it acquires through criminal or asset forfeiture.

Bad luck for any shitcoiners hoping the US government might buy their bags…

Overall then this Executive Order was far more rational than Trump’s social media posts earlier in the week suggested it might be. The clear distinction between Bitcoin and crypto suggests that the Trump administration does understand the difference, and it’s welcome news that they don’t have plans to start buying shitcoins with taxpayer money.

As for their plans to acquire more BTC? It’s hard to say what impact this might have or how they might go about it just yet. So far, the only way they have ever acquired Bitcoin is through asset seizure.

Could the treasury sell gold to buy Bitcoin? Could they issue Bitcoin bonds? These are certainly possibilities, but for now that’s just speculation. If they were really smart, the first thing they would do is dump any shitcoins from their ‘Digital Asset Stockpile’ and convert it all immediately into Bitcoin!

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The US Strategic Bitcoin Reserve – What Comes Next?

So what comes next?

Well, that’s anybody’s guess. If you’d told us in 2023 that by 2025 the US president would have launched his own meme coin on SOL and endorsed XRP, ADA and ETH before going on to launch a Strategic Bitcoin Reserve, we wouldn’t have believed you.

All we do know is that on Friday evening this week, Trump will have hosted the first ‘White House Crypto Summit’ with attendees from across the crypto industry.

(This newsletter was written before this event, so by the time you’re reading this, there may have been even more announcements, or it might turn out to be a bit of a nothing burger).

What to expect from this summit is hard to predict, but despite the Executive Order being far more favourable toward Bitcoin, the list of attendees to this ‘crypto jamboree’ remains a who’s who of prominent shitcoiners:

There’s a distinct absence of anybody who contributes to the Bitcoin ecosystem directly. None of the builders, or best educators will be there and nobody that’s attending can claim a direct contribution to Bitcoin other than buying or promoting it.

If we’d have been in charge of the list, it would have looked a lot different.

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Build The Only Bitcoin Reserve That Matters – YOURS!

So, the politicians have arrived and have brought with them their own special brand of chaos. There’s nothing we can do to stop them getting involved with Bitcoin and it was always inevitable that they would join the game.

The result is that yes, nation states will start accumulating Bitcoin, and yes this will invariably ‘pump your bags’. But don’t be fooled into thinking that Bitcoin’s value depends on the actions of any politician. Bitcoin is valuable full stop. If you hadn’t noticed, Bitcoin was outperforming everything long before any politicians started talking positively about it.

Your bags were always going to pump anyway.

It’s hard to predict exactly how all this plays out, but despite the Executive Order being more favourable to Bitcoin, based on our experience, it’s prudent to steer well clear of anything even remotely related to shitcoins.

The best course of action for any discerning Bitcoiner is to steer well clear of the circus!

Pinning your hopes on politicians is likely to leave you disappointed. Pin them on yourself instead. Yes, your government has started buying Bitcoin, but it’s still making questionable decisions about shitcoins. Rather than worrying about any of that, you can stay focussed on building your own Bitcoin-ONLY reserve and learning the skills to protect it in full self-custody, far away from the madness.

Bitcoin doesn’t just separate money and state. It can separate you from the state as well. Given their questionable antics over the past couple weeks, that might not be such a bad idea!

When you’re ready to exit clown world and learn the skills to build your own secure Bitcoin reserve, then we’re here to teach you everything you need to know. Book a free 30-minute call with one of our experts and let’s make sure you front-run your government the right way.