The Race Is On To Frontrun The U.S. Government

As the 2024 election draws to a close, it is clear that Donald Trump, the soon-to-be 47th President of the United States, will be the most pro-Bitcoin leader in US history.

But the big question remains: How effective is he in activating his strategy?

In Bitcoin 2024, Trump – as well as Robert F. Kennedy Jr. and Republican Senator Cynthia Lummis – that they want the US government to buy Bitcoin. Everyone appears to be in a better position to enact this law after the election, with Republican Party representation in government greatly increased.

However, as to how quickly the United States can become active in the market, it is more ambiguous. Since the bill was announced, Bitcoin has risen from $60,000 to $86,000, and with the US government buying soon, there is even more incentive for the price to surge.

Here lies the problem: The United States has telegraphed to the world that it intends to buy assets in short supply, without the tangible ability to do so.

Even with majorities in the House and Senate, passing the 2024 Bitcoin Strategic Reserve legislation would still require a congressional resolution and approval from lawmakers. It may seem foolish to expect that this won’t be complicated or time-consuming.

For example, the bill proposes revaluing the Federal Reserve’s holdings of gold, as well as integrating Bitcoin into government financial systems. Questions are likely to abound, as are operational challenges. Let’s remember that it took three years for the SEC’s staff bulletins to be amended just to properly evaluate Michael Saylor’s public market Bitcoin buying spree.

This is the nature of government: slow and bureaucratic. Even with Trump, RFK, and other Bitcoin supporters in positions of power, the chances that the US government will start acquiring Bitcoin on January 20, 2025 seem very slim. This does not mean that it will not happen at all, but rather that it will not come at the right time.

This even ignores that there may be a challenge in prioritizing. The cryptocurrency lobby may want to move quickly on the long-awaited market infrastructure bill. If so, Congress may become more concerned with stock exchange barriers and redefining securities laws than with the strategic reserve issue. After all, they helped finance Trump’s victory.

How high can Bitcoin rise in the meantime? With the bull market in full force, I believe institutions and governments have every reason to become active in the market. There are many systems around the world where the executive branch has enough power to start accumulating Bitcoin today. It would be foolish not to outdo the US government.

El Salvador began this operation in 2021, and has collected more than 5,900 BTC. However, it faced market headwinds for two to three years, as traders opposed its entry. Lest we forget, El Salvador bought hundreds of bitcoins at a price of $60,000, a move that for years was fuel for its enemies.

Trump may do his part to boost Bitcoin. However, by communicating his intentions, he almost certainly created conditions that could be exploited by savvy traders.

Time will tell whether we will see, among them, other nation-states.

Today, I received confirmation that another nation state is currently discussing the matter

– Strategic reserve of Bitcoin
– Drafting Bitcoin mining regulations so they can improve their electrical grid and better monetize stranded energy

It happens

– Daniel Batten (@DSBatten) November 11, 2024