Topic: Everything you wanted to know about Bitcoin Strategic Reserve. (Read 944 times)

That's a funny statement coming from the fiat-guys. Fiat is only backed by other fiat. Or one could argue it's backed by an army, which makes Bitcoin backed by armies too once governments add it to their Strategic Reserves. Fun times

People have all kinds of foolish expectations, but the market is more complicated than it looks like. When all the stocks are on fire, it's reasonable for bitcoin to lose some percentage as well, because it's plausible that some people liquidate their holdings at that time.

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Powell stated that they "are not allowed" to own any bitcoin. To me, this marks a significant shift in perspective. We've moved from the critique that bitcoin is "backed by nothing other than thin air" to the acknowledgment that "this is not the appropriate department to hold it". It's bullish, but I remain skeptical until I see it put into practice, and so should everyone in this thread. You're relying on politicians to do their job right. Hasn't worked well as far as history is concerned.

Secretaries? I'd expect them to have a newphew that fixes their computer. How hard could it be to ask that nephew to set up a little wallet for storing a million Bitcoin? Just create a private key out of the nuclear launch codes or something Just don't use 00000000 again

1 as well is not surprise. In Every SBR discussion it never was the FED designed to hodl the coins. It either was the Treasury or a newly designed Entity (presumedly non the crypto Kratz, btw).

A lots of details, but no need to change any current scheme or law.

I'd say 1. and 2. are only good news for Bitcoin, and 3. is no surprise.
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Exactly and I said it in another thread. Powell did not say anything new, strange, or unexpected. He said the truth, that the FED is not trying to set up a crypto reserve at the moment. Why would they? Trump has no power yet and it's his idea. Holding bitcoin should be done by a branch created specifically for that. You don't want to give a bunch of random bankers with traditional background some private keys and hope they'll keep them secure. Most of these grandpas have secretaries that do computer stuff for them. You need to hire crypto experts to set up a cold storage for you, pretty much like EL Salvador has done.

Wow a well written and documented thread, Mr. Filippone are you sure you’re not a professor or a Doctor(Ph.D).

I jus wanna add that the state of Ohio has also introduced a pioneering bill to establish a Bitcoin reserve, spearheaded by State Representative Wes Goodman, potentially positioning the state as the first in the US to hold BTC as a reserve asset.



Powell jus made a lot of people loose their money And even on Wednesday the 18th, President Trump in his speech in the Washington Crypto Policy Summit restated that the US Government is still pro crypto reassuring the crypto enthusiasts that the US intends to keep “our business in the United States, rather than China or some other place” regarding bitcoin.

So hopefully things will change as Trump and his organisations has declared.

I do believe that there is a minimum amount of money that is required to be happy. Sure "money doesn't bring happiness" is true in some senses, like for example while it can purchase great healthcare, like you can get the best doctors and hospitals and medicine and what not, it still doesn't guarantee health for too long, there are plenty of rich people who suffered disease or even death at young age even though they were rich.

However, if you can't pay your rent, do not have money for any good food, or can't buy stuff that you need, that's not going to be good neither, so while you do not need a billion dollars to be happy, you also can't survive on 500 bucks a month neither. As long as you have a minimum amount that covers your survival, rest is all up to you.

If this drops the price of Bitcoin, that means people were expecting something else from the FED. Like.... seriously? Of course the FED doesn't like anything else than the money they themselves print out of thin air.
I'd say it's a good thing if the Bitcoin Federal Reserve is not going to be held by the FED. Create a new agency for this, one that is actually government owned.

From your link:
I'd say 1. and 2. are only good news for Bitcoin, and 3. is no surprise.

It reminds me of this famous quote:

Powell says Fed cannot hold bitcoin, not seeking to change that


Most likely this is the news that bring the price down.

But let's see how Trump will response to this, or if he can vetoed it to make it a law (not sure about this, I'm not a US citizen).

We all know that this is going to be the race in the future, with Russia and China amongst those who wanted to stockpile Bitcoin as reserved.

If you have read how the statement that the IMF gave to El-Salvador, they strongly said that if El-Salvador wants to get a loan from them then Nayib Bukele must limit the use of bitcoin in his country as one of the conditions to borrow money from them.

This may be a special concern again regarding the policy of what Trump proposes about Bitcoin as a US strategic reserve asset.

Okay, what possibilities will be conveyed when this policy is deliberately not agreed upon “I have proposed Bitcoin but the results of congress are deliberately manipulated (instead of fulfilling his promises)” the rest of the time he is hands off with what he has said during his campaign.

At this point, the Government has no choice than to do the needful, Bitcoin as an asset class would ensure that cause many governments are beginning to see the potential of Bitcoin when it comes to nation building, they've seen how well it could help improve their economy if only they can buy and reserve for the future therefore, that's why several government are beginning to copy what El-Salvador did with the coin and directly or indirectly they'll be forced to give in to financial freedom in the near future, embracing Bitcoin alone would ensure that. The Banking system is failing and several governments would turn to their Bitcoin reserve to back up their fiat and also as a hedge to inflation and i believe that with time, Bitcoin would be widely used for carrying out transactions around the globe when all the major economys jump in. Their are more better days ahead it's just a matter of time.

https://www.cryptotimes.io/2024/12/17/eu-mp-sarah-knafo-warns-of-digital-euro-promotes-bitcoin/

Another been outspoken about the dangers of totalitarianism and limitations(against Inflation) of the CBDC

That's the thing with unions like this
I bet before they come to a mutual agreement many countries might have gone against the indecisiveness of the union or they would all be left behind.
Government doesn't go hand to hand with giving freedom
So won't be surprised if they take their time.

In addition to these two countries, a France member of the European Union proposed to follow the same principle as El Salvador, and build a bitcoin strategic reserve: https://x.com/saylor/status/1869014535698563573.

This is precisely what I meant by "encouraging everyone to follow". Judging by the economic incompetence of the members in the EU, I would expect them to be the last who adopt the proposal, but there's clearly a tendency towards that direction. More members are starting to wake up from the totalitarian central bank system we've had so far, because now they recognize there is an alternative.

What i think is that Trump is a powerful personnel who has a vision to make America great again, he wants them to remain at the top and he's bent on achieving that, Bitcoin as an asset class has a good store of value and can also be used as a hedge for inflation it's a good thing many governments that críticísed are beginning to see it's potential of nation building when it comes to strengthening the economy and of course owning the largest Bitcoin reserve would ensure that America remains at the top in future.

 The citizens of Trumps nation should be happy that they've got a president that believes in Bitcoin and it's potential, Bitcoin is a good way to secure a better future when it comes to finance and trump being a Bitcoin lover would ensure that certain regulations against Bitcoin by the previous regime would be kicked and majority won't miss out of accumulating it and enjoy it's future benefits.

with this statement of his, I see a courageous man that have decided to make a huge good difference in Bitcoin investment  for Americans and Bitcoin enthusiasts in general, though those are just words but bold step at sight and very encouraging, I think for me trump stands for a no nonsense in terms of success pursuit, people may see those statement as nothing but coming from the world poweful president elect, it's a good win for Bitcoin and at this point anyome still being skeptical about Bitcoin investment is not doing him or herself good.

Trump doesn't want to joke with Bitcoin investment because he understands the importance of a nation identifying and having Bitcoin reserves for a long-term, he has proven that he is economically sound to have seen Bitcoin future potentials and wanting to embrace it in full, what grows a nation economy is by making good financial policies that has the ability to trigger a country economy in the future, for me I think Trumps statement show that he has idenfy what Bitcoin is capable doing if they consider having it as a reserve, he understands what it meant to have a long-term asset that is profitable in the future, he wants America to have Bitcoin reserves in quantum which is good for America and the entire Bitcoin community worldwide.

Those people still procrastinating to invest should start now before the will regret their actions in the future, Bitcoin is an investment of the future and anyone that want to come into Bitcoin investment should abide by those concept and apply them in other to scale through, Bitcoin has come to stay and I think the best thing anyone can be doing now is to keep acumulating and holding for a long-term benefit.

It's clear that they don't really want bitcoin for what it is but only wants to use it as much as they can, infact price manipulation will become an obvious effect of making bitcoin a strategic reserve. The volatility of bitcoin wouldn't be normal anymore, it's always going to be in favour of one government or another leaving individual holders in an uncertainty. It's still not bad they big countries are proposing BSR but my big question always remains are we safe?

I felt weird around this forum when I was saying things like this because everyone seems to have a very different perspective of governments especially the US government proposing BSR and I believe that your opinion will be their biggest play because obviously there no other strategy other there that can beat becoming the top holders.

Having gold is not equivalent to buying gold. The gold reserves in Fort Knox are not kept as an investment or as a justification to pay out the 40 trillion dollars worth of debt when gold reaches $1M / oz. They're kept for legacy reasons. But, buying bitcoin as a plan to pay out the debt, clearly encourages everyone to follow, and do the same with their debt. This week I read that Japan and Thailand are thinking of either buying bitcoin as strategy or propose a legal tender.

The best strategy they have, in my opinion, is to buy all the bitcoin. There's no other endgame. Putting themselves in the top of bitcoin holders would make it much easier to re-establish their position as money masters.

That is the part I have witnessed first hand and I am loving it. When I first got into bitcoin, and told people that I have a few bitcoins, they all thought I was buying drugs with it, and I hated that, and now they are all investing into memes like crazy lol. That's the type of turn around that I love to see, same people who looked at me like I am some drug dealer, ended up getting PEPE and invest like half of their salary into some silly meme token or something, it is so funny to see that and mock them about it as well.

It's clear that world of crypto has evolved around, and not just technically, while technically we have developed and invested into better stuff as well, that's not the main point and not the result neither. The main point is that we are seeing much better approach right now with what people think about when they see bitcoin investor, and back in the day it was a lowly thing, nowadays it is a much better and respected thing to do and I love that about bitcoin.

I would think that there is going to be an attempt to harness and control bitcoin, but that does not mean that the attempt is going to be successful.  Surely, the more and more that bitcoin is held in the hands of BIGGER institutions, then there may be attempts to make self-custody illegal and/or very difficult... but that does not mean that they are going to be successful in that, either.

I agree with your insinuation that the battle is not over, and it is likely going to take a long time to play out, including ups and downs along the way and ongoing casualties.


Surely self-custody is not going to be easy for governments (and financial institutions) to control, but the difficulty in trying to control self-custody does not mean that governments and/or financial institutions aren't going to try accomplish such.  They might not have any other route that they believe to be feasible, rather than just giving up..and totally embracing it without conditions..

I understand from your points of reasoning, the US community and administration is not an ease pass when it comes to decision makings and regulations. The new administration to hold power under Trumps regime may not be the actual wolves in sheep's clothing but with due passive adoption and how it has triggered lot's of new investors to hold, some of these investors do not practically understands the work load on maintaining a decentralized portfolio that is out from the control of this administration. The more the government act like they care the easier it becomes for them to chip in certain regulations because many people are already being too convenient with the new adoption.

It seems to me that if Agbamoni starts from the mindset of setting limits, he will not be very much in favor of letting the free market regulate itself.


For me it adds up. The one who talks about the strategic reserve believes in the free market, believes in a small state and low taxes. Banning CBDCs to me is as important as a strategic reserve, which is not often mentioned and which we have under preparation in Europe. Both are a logical consequence of how the US president-elect and those around him see the world.


That's right, the US does not need a standard bitcoin at all, nor will it do so.But by acquiring the largest bitcoin reserves in the world, it will strengthen its currency without it being directly backed by bitcoin.

your definition is much more like depositing bitcoin into a subnetwork hub channel manager, and then play with unconfirmed units that are not in the same measure/format of real sats. and then the peg rate changes over time from 1sat=1000msat to then be 1sat=1000000msat. and then when enough naive noobs are playing with msats on the subnetwork. they make it too expensive, and a headache to close out the account to get confirmed real sats, thus forcing people to stay with playing with msat
.. oh wait that economy was already trying to be implemented by institutions that sponsored core devs who promote and adore the subnetwork roadmap

but the actual strategic reserves is not about giving citizens a pegged currency of bitcoin, but instead invest fiat in another currency to later sell for profit and return to fiat for later fiat spending by the government/institution

A Bitcoin Reserve doesn't mean they'll create a Bitcoin Standard, just like having Gold Reserves does't mean there's a Gold Standard.

If this is going to be anything like the way people lost their gold to government, there may be a time when you can deposit your Bitcoin into a government wallet, in exchange for a digital receipt on your account. Then government can artificially increase the amount of Bitcoin in circulation, just like they did with fiat money after they abandoned the gold standard. And a decade from now, suddenly there are much more Bitcoins in circulation on accounts with banks, and the value of a "paper Bitcoin" gets devaluated. Gold is worth about 100 times more now than it was when the gold standard was abandoned. Or better yet: the dollars you received in exchange for your gold can now buy about 1% of your gold back. If it's not obvious yet: I finally started reading The Bitcoin Standard ebook.
Maybe "Not your keys, not your coins" works better to keep your own money than it did when people handed over their gold coins.

The enemy is not no-coiners. I don't care about a bunch of fools who don't understand basic economics. My concern goes to the money masters of America. Those people have historically used everything in their disposal to keep the world under a fiat standard, and now out of nowhere, the president promises the people bitcoin, a currency that completely undermines the purpose of fiat currency across the world. Something just doesn't add up.

Thanks @Fillippone, for giving clarity with proof of what strategic reserve really means and how it relates to BSR, it's an educative exposition for everyone to grasp. I'm perticularly excited about how the table has turned around in less than 15 years of Bitcoin existence, how almost everybody and countries generally thought that it was a scam and won't last but today that naretive is changing very fast.

Having Bitcoin as strategic reserves by cities, institutions and governments will go a long way to show those that are still skeptical that Bitcoin is indeed a store of value and they're welcome to enjoy the benefits of holding it for a long term. I believe that if Trump, implements favorable Bitcoin policies in his incoming administration, especially having it as a strategic reserve, it'll go a long way to encourage other countries to do the same because the US is a pacesetter. Also if the top cities that are proposing BSR will implement it, then it might become a norm for other cities to strive and do the same.

Since Bitcoin has finite supply, the effect of holding it as strategic reserves will be scarcity which will be an added factor for it's continuing price increase and ATH in the future.

Lol. What you're asking for is like hard-coding KYC in the Bitcoin protocol. Let's not do that. If anyone wants to try to buy all Bitcoins: let them. That's the beauty of a free market.

This reminds me:

Navigating your mind about this does look like that, where not a little old money in America says Bitcoin Scam, Bitcoin will die and curse to be zero, indeed not a few Sotck Market practitioners who tighten such things, so I'm not surprised to see your views on this matter.

Until now regarding the policy is still being debated and has not been agreed upon, seeing the act of rejection carried out by several Microsoft holders in submitting Bitcoin as one of his investment assets shows that things in your mind are still possible for the rejection on US goverment.

But I hope Trump will be able to carry out good political maneuvers to help him support this plan.

With a pro Bitcoiner as president elect there's chances of making Bitcoin a legal tender in the states but then the USD is still valid and i feel his administration would explore the potential of Bitcoin to backup the USD. However i think it’s becoming a competition if im to judge with Trumps speech, cause he was like others are buying it but they (the U.S ) want to be the best and what i think is that once they start buying aggressively for reserve other top nations would follow suit no one would want to be left out and that alone would cause more hike in the price of Bitcoin, we might even see the price rise more further than expected. Well, even though they make Bitcoin a legal tender in the states, there's no doubt that it would have the highest number of people holding Bitcoin but then it doesn't mean they have controlled over Bitcoin, Satoshi was wise enough to make it decentralised so shall it continue to be.

The FOMO that a US SBR will trigger is beyond our comprehension.
Many nations are now FOMOIng in the physical Gold race, so I bet little will change there for digital gold once the first triggers the start.
El Salvador and Buthan already did, but they are too small to start the imitation game.

Best? If words stated is a major criteria in been considered best, then most politicians would be worshipped.

Many are still skeptical as can be seen in the poll in Polymarket increasing to 35% from around 28%.
This shows that many would really believe when it gets implemented.

Once the US implement there could be chain reactions to other countries like Russian in wanting to accumulate.
I guess we common folks have just now to start accumulating.

We cannot compare the financial strength of El Salvador to that of US. El Salvador is a country that does not have a stable economy and has low financial capability. Since they accepted Bitcoin as a legal tender nothing much has improved significantly in the value of their currency and purchasing power.

My fear is that the US should not make Bitcoin a legal tender if not the reserves plus the legal tender would make the US citizens the highest adopters of Bitcoin. I don't want any direct control of Bitcoin coming from one country. Instead,, there should be a maximum limit to the quantity of Bitcoin that can be reserved by any county in the interval of one cycle. Apart from the US there are other countries that has enough money invest in the Bitcoin reserve which i do not want it to be competitive thing.

Good point. I guess that's not how it works when governments are making decisions. A private person or even companies could quietly buy a lot of Bitcoins, government can't really do that.

Not at all. I'm not interested in how it will happen in practice. They're probably going to be buying around 500 bitcoin every day for as long as his presidency lasts. (That's what El Salvador did, and it's one simple tactic to avoid causing a supply shock multiple times.) I'm interested just to know if it will or it won't happen. A 'yes' or 'no'. It's too good to be true to have the enemy in our side that soon. Feels like it was too easy to have them admit defeat.

Looks like you are more interested in the implementation directly, but today is still a debate and speculation of the media (because Trump has not been appointed), although Trump said it was not necessarily agreed upon by many parties under his leadership because we knew that democracy in determining the interests of the country is definitely will be done, so it is very natural you will be skeptical about this.

This plan should have been implemented with Trump's intention to make the US as the leader of this industry, so he must begin earlier by making Bitcoin as one of the reserve assets that must enter the state portfolio.

The last time Donald Trump was elected, he made various statements about working with BTC, but later, we did not see him do anything about Bitcoin. This time, however, the Bitcoin market is moving like the statements he made about Bitcoin before the election.

However, Donald Trump will do something good with Bitcoin this time, and we can see his direction. It is not important what China or neighbouring countries are doing; this time, the strategic aspects of Bitcoin that Trump has started inspire us, and we hope that something good will come from this. I'm still optimistic that since he will do something about it, we may see something good for Bitcoin from him. You have raised a nice point, Thank you fillippone.

Trump is really the best, this comment by Trump is very important and very positive for crypto. If the United States accepts crypto and fully supports crypto, it will give much more positive results not only in the economic field but also as well as cryptocurrency and bitcoin. such an Trump attitude will bring much more positive movement for crypto and bitcoin, as well as strengthen the country's economy. And due to such a positive attitude of Trump towards crypto, cryptocurrency will go much further. Trump is best for crypto growth.

Trump confirmed that he's still interested in building the bitcoin strategic reserve. However, I'm still skeptical about it, until I see it in action. In general, though, everything looks extremely bullish. Very nice writeup, fillippone.

What is "this"? Their plan to set up a bitcoin strategic reserve? It needs to be made public so that it can build consensus, otherwise the act won't get enough votes.

What i love about his speech is where he stated that "others are embracing it, and we want to be ahead" that's a very powerful speech and you'll know that such person has  zero tolerance to failure, wants to be second to none and is aiming for greater heights. Individually that's how aggressive everyone needs to be when it comes to being successful financially, Bitcoin is very futuristic therefore everyone who wants to be on the benefit side in future needs to put in their best effort in accumulating more and more of it against the future and it's high time the world in general embrace it for a better future, i see people still criticing Bitcoin at this point in time and it gets me shocked that even with how it's improved and shown great potential they still criticize it, some government are still yet to uplift bans placed on Bitcoin involvement and i feel bad for their citizens cause they're missing out in accumulating this digital gold against the future. However the U.S should proud that they got a president elect with such mindset, someone who's goal is to put them in front as the best among all.

This is the most bullish statement so far:

Trump Confirms Bitcoin Reserve Plans—$15 Trillion Price Boom Predicted


This is the interview mentioned in the article:




China has been gold. US want to be ahad because they are being beaten in the race at physical gold.

Fixed:




Regarding the pool, I guess he hinted at the BSR more than necessary, and in a sense we are here also because he did that.

Not quite much.
Trump has barely mentioned anything about a BSR for quite sometime now.
The poll was in a bigger favour when he was campaigning
Once he mentions anything positive about the BSR even before his inauguration then there would be a sharper increase.
It's mentioned in 100 days, so Trump silence has an impact in it more than if it were based on his tenure.

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The numbered 6 Opinion and thoughts is written as Opinions and Though.

A great Compilation, Just realised my knowledge of the BSR was quite shallow.

Everywhere I turn, I see new signs of a BSR:



Bessent meeting Senator Lummis is an extremely bullish signal on the case of a BSR.

At this point, the pool on Polymarket seems lagging to me:


This should be higher compared to OP.

Something like that is possible, but if I'm not wrong then they're trying to target the miners to pay their mining operation taxes in Bitcoin initially.

They won't be forcing them of course but I believe miners won't hesitate either to pay taxes in Bitcoin.

Some of them who really prefer to hold Bitcoin may pay taxes in US dollars while there's chance that some of the miners would prefer to pay the taxes with Bitcoin.

It would also be quite useful if they miners may pay their State level Taxes in Bitcoin as that would be pretty helpful for that SBR.

Letest proposal by an US nation:

Texas House introduces bill to establish a strategic bitcoin reserve



It looks pretty vague to me, and I can't see how this bill could Help Texas to build a meaningful SBR.
Maybe they could push the Miners to pay their State level Taxes in BTC?

Well, bitcoin can act as a counterweight for that.
For sure, the States might have the incentive to print more money out of thin air, buy Bitcoin, print more, and buy more Bitcoin. The effect would be a dilution of their debt, bitcoin going up, a little bit of wealth effect for the Government, the elites, while the masses are inflated away.
The point is that this trajectory is inevitable. The fact is how much the Nation State want to rig this game.

Comparing what El Salvador has managed to accumulate from a period of 3 years till today will turn out to be approximately 3% of what the US government are applicable to gather in a whole year then multiply in four years. This will turn out to be the biggest Bitcoin purchase to be recorded, but i tend to find question concerning how much of an impact it will do on the price of Bitcoin following how and on what process will the relatively 200,000 Bitcoin be bought without altering the four year cycle, for such a big buy to happen in a year period then for another 3 consecutive years, totalled to four years in total?

Likely one of the criticisms of recent governing dynamics has been a lot of their inabilities to plan for long-term down the road and/or to follow through with such planning in fiscally disciplined ways.

Surely many folks have come to question the governments ability to employ self-disciplined and financially sound practices (including limiting themselves to spending within their means) - which is ongoingly abused by so many governments, and perhaps the ones that are disciplined and strive to spend within their means are punished for being responsible.

Honestly speaking, if I had to think about an asset that I would be happy to put in a box for 20 years only to be sold not earlier than that date, I would go for Bitcoin.
I have no certainty about the state of crypto in 20 years, but I am sure that Bitcoin will be there at a nominal price above today's (not so sure about every shitcoin).

If anyone hears Eric Trump speak they will see that he understands bitcoin very well, unlike the father, or at least how little the father showed he knew until recently. It's no longer that the US president is surrounded by bitcoiners in his cabinet, his son has a deep understanding, which is very bullish. At first we could think that Trump approached bitcoiners out of pure electoral interest, and so it appeared when he went to the Bitcoin Conference but today it seems that he is going all in with the subject.

Added in OP a couple of references to the interest in creating Bitcoin Reserves:

• Russian Lawmaker Proposes Creating Strategic Bitcoin Reserve: Report
• Eric Trump about US BSR
• a presentation at the TBAC Primary use case for Bitcoin seems to be a store of
  value aka “digital gold” in a decentralized finance

I will try to keep the OP updated with the most relevant news.


This is precisely the reason why a BSR makes a lot of sense.
In a sense, they are already doing this, and if you don't realise it, you are being inflated.

This could only  be the result of a properly and timely done research into the subject matter which have raised doubt and been the result of lots of contradictory opinions on the subject matter. This compilation however, clears things to a greater extent. It’s sorts to instruct and teach in its patterns to arrangement and I see you to have several threads like this one, great work and well done @Fillippone.

Looking at reserves from the point of being a critical nature resource stand point, do Bitcoin really fits in as such?

Also, what are your thoughts on the fact that, government could print money out of thin air only to use it in the purchase of our precious Bitcoins. It would as well result in inflation as there would be more money in circulation than needed but, at the expense of them Bitcoins. Would it help the course that much?

Just a key I happen to note as I read:
Bitcoin Strategic Reserve (BSR)

Fillippone bravo ! Another great, useful and informative article !
Something tells me that in 2025, this topic will be very relevant, and we will watch its development ! I hope for the continuation of the article, with adjustments to real events !

Congratulations, fillippone, on this well-written thread, which looks more like a PhD section than a forum post. I see you fighting to reach number 1 in merit earned in the near future.

At this time a thread like this comes in handy to remind those of us who have bitcoin to keep holding or even keep buying if you think you have too little. There are people selling, as we can see by the price drop, and today Microsoft shareholders have refused to add bitcoin to their balance sheet.

Some people seem to forget or don't seem to be aware that the recent rise of bitcoin and the state FOMO that has been unleashed, reflected in point 5 of the OP, is in large part due to the upcoming creation of a state reserve in the USA. Even if we are 50% wrong those of us who are more bullish and instead of amassing a million bitcoin, USA ends up amassing half (the 200K it already has and buys another 300K), the $100K per bitcoin is going to look like a bargain, and all those who are selling now and those who are refusing to buy, like the MSFT shareholders, are going to regret it.

The inauguration date is for sure something to look out. In case he is mentioning bitcoin for sure  this would be extremely bullish, let alone him mentioning a BSR.
For sure, the inauguration speech is like a program for the first 100 days, so I would be surprised in case of him not mentioning BSR.
Conclusion: Polymarket is underrepresenting the true probability of the event.

Polymaket is now one of the reliable prediction platform because of its near accurate predictions of the IS elections. Actors in the crypto industry see Donald Trump as a president with an unpredictable personality. There are some level of doubt if he would implement the policy of adopting Bitcoin as a strategic reserve currency. Joseph Chan the Chairman of Chinese based Silk Road Economic Development Research Centre said: "Trump is unpredictable. He may change his mind tomorrow; you never know". I am not waiting for his first hundred days to know his stance, the content of his inaugural speech might give some clue.

I do agree with your considerations.
I was actually thinking about some shorter agreement, something like a rolling 30 days average or so. Market impact wouldn't be huge, and probably would benefit the miner the most with some opportunistic behaviour, without impacting the US government buying in the grand scheme of think.
Buy fillippone just pawn in the game of life.

I can think of a few problems with this plan already:

• If market prices go up and miners have to sell at a fixed price (under market price), other miners will get more money, buy more hardware, and increase the difficulty. That means the fixed-price miners will mine less.
• If market prices drop and miners get a fixed price (above market price), other miners will drop out, after which the difficulty drops. So the fixed-price miners will mine more.

There's a reason the price is left to the market.

It's crazy how far Bitcoin has come. Just a few years ago, most of these countries saw Bitcoin as the next biggest scam; today, they're all proposing to have a Bitcoin reserve. Even Trump, who is the most pro-Bitcoin figure today, was very much against Bitcoin in 2019. It just shows how far Bitcoin has come.

I know bitcoin as an alternative currency was Satoshi's original idea but I don't know if he thought that alternative currency would be Federal Reserve one day.
Bitcoin has a reserve in different states will mean more scarcity while the demand will increase and that will mean an increase in prices. This might make Bitcoin get to prices we haven't imagined.

It was a nice summary you made. Very easy to understand and concise.

The US government HODLing Bitcoin for 20 years? What would the cryptocurrency world look like in 2045?
Maybe the idea of the confiscated Silk Road BTC being moved to a strategic Bitcoin reserve is good, but I don't think that the US government will suddenly start buying lots of BTC. 200,000 bitcoins bought by the US government for 4 consecutive years probably won't be achieved.
Anyway, I find it hard to believe that such legislation would happen and the BTC price would hit 500K or 1 million. The bulls on the market are maintaining the hype and the FOMO, but a price crash might be coming after several months. Trump isn't a predictable guy and he might try to change his crypto promises(or break them).

As per popular request, I added a paragraph on the market expectations following the launch of a BSR.
Of course, it is Not Financial Advice.

If you want to see more stuff added, please let me know.
The subject is evolving, so I will try to keep the OP updated with the latest developments.

Love this thread, fillippone.

Very thorough, covers everything we need to know. Very exciting times if a BSR is to bear fruition. We can throw our $200,000 cycle top predictions in the bin and aim higher.

Out of Merit at the moment but will give generously when I replenish.

Great work.

The one thing that doesn't make sense to me, is announcing this. The Serbian statement of making it happen behind closed doors makes more sense.
If you're going to buy a significant chunk of any market, prices will increase. The same thing happens when a company announces it's interest to buy another company, and it's now happening with Bitcoin. If the US government wants to buy 800 kBTC (for those numbers we should start using "kilo Bitcoin"), they're paying more already just because they announced it.

I'm not buying the "taxpayer-neutral" part. One way or another, if government spends money, that comes from taxpayers. They may make it look different on paper, but there's also an ever increasing debt that could have been reduced with the same money.

Gold didn't go up 6058% in value, the dollar dropped 98.38%. If they're moving towards a Bitcoin Strategic Reserve, then the value (measured in dollars) will go up forever due to eternal inflation.
That makes me think the BSR is just a way to join the Bitcoin train, while protecting the dollar printing instead of bringing back sound money.

Price impact of the BSR is something that I have left out of the analysis so far, as the estimate are highly hypothetical. But maybe is worth adding a paragraph on it, and the snowball effect from the first mover.

In addition to that, I would like to highlight the fact that in this thread I will analyse Sovereign Stetes running Bitcoin Reserve, as I covered private (MicroStrategy) reserves elsewhere.

...

Excellent article, filliponne!  I was thinking earlier today of inquiring among forum members about:

A)  the prospects of serious players (major nations, or even companies like MSFT or AMZN) setting up their own BTC Strategic Reserves. 

B)  the advantages of being a first mover (presumably getting BTC at a lower price), the amounts of BTC to HODL, how to raise the money to buy, just HOW do they go about it, how much acquiring Reserves would affect price, etc., etc.

*  *  *

I have not read through your referenced links, so that's on the menu for tonight.  Your thread is extremely timely.

Lately, the Idea of a Bitcoin Strategic Reserve (SBR) has surfaced in many news reports. The idea that the US could use Bitcoin as a strategic reserve has proven fundamental to propelling the price of Bitcoin through the 100K barrier.

In this thread, I will explain what a Strategic Reserve is and How a Bitcoin Reserve is relevant.

1. Definition of a Strategic Reserve
2. The current proposal: B.I.T.C.O.I.N. Act
3. Implementation Details: how could it be done
4. Price Expectations from a BSR launch
5. Other Implementations around the world
6. Opinions and Thoughts from other stakeholders
7. Market Expectation
8. Links and documents

---

1. Definition of a Strategic Reserve

A strategic reserve is a stockpile of critical resources set aside by a government, large institution, or other entity for use in exceptional circumstances—such as emergencies, severe supply disruptions, wars, or periods of extreme market volatility.
Unlike regular inventories that cycle through daily usage, strategic reserves are intentionally maintained as a buffer against uncertainty, ensuring stability and security in times of crisis.

Strategic Reserves have a few characteristics that are unique and make them different from standard storage:

• Long-Term Storage: Strategic reserves are typically stored for extended periods and released only when severe disruptions occur.
• Critical Nature of Resources: The commodities or assets involved are essential to national security, economic stability, or societal well-being
• Controlled Access: Governments or top-level governing bodies usually oversee the maintenance, release, and replenishment of these reserves, guided by well-defined protocols.

For example, the United States currently has two principal Strategic reserves.

• Strategic Petroleum Reserve (SPR): after the oil crisis in the '70s, the US government decided to create a stockpile of oil administered by the US Department of Energy to be used both to protect the US economy against extreme market price fluctuations or as a reserve to provide power to the domestic industrial activities in case of a supply chain problem, or war. Currently, the SPR has more than 390 Barrels of oils (the maximum allowed capacity of the reserve is more than 700 million barrels) held in 4  salt Caves along the Gulf of Mexico for a valuation of about more than 27 billion, with the WTI trading at around 75$ per barrel.
• Gold Reserve : The US has the largest Gold Reserve in the world, with about 8,133.5 metric tons totalling almost 700 billion in value. Nearly 65% of those reserves are held at the United States Bullion Depository at Fort Knox.
  The Federal Government owns the Gold. The Government has issued "Gold Certificates" to the Federal Reserve Banks for a total amount of $11 billion. This certificate serves The Federal Reserve Banks as a small portion of collateral for the Federal Reserve Notes. The Federal Reserve doesn't own Gold.

The US government has many other Strategic Reserves, including natural gas, grains, food, and cheese (it used to have raisins Reserves until 2015).

---

2. The current proposal: B.I.T.C.O.I.N. Act

Cynthia Lummis, a Republican senator from Wyoming, introduced the idea of a Bitcoin Strategic Reserve in July. She has advocated for the US government to consider Bitcoin as part of its long-term strategic reserves. In the US Senate, she named the bill BITCOIN (Boosting Innovation, Technology and Competitiveness through Optimized Investment Nationwide) Act.

Quote

July 31, 2024
WASHINGTON, D.C. – Following her announcement of a historic proposal to supercharge the US dollar and pay down the national debt by establishing a strategic Bitcoin reserve, today US Senator Cynthia Lummis (R-WY) officially introduced the Boosting Innovation, Technology and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act in the US Senate.
"As families across Wyoming struggle to keep up with soaring inflation rates and our national debt reaches new and unprecedented heights, it is time for us to take bold steps to create a brighter future for generations to come by creating a strategic Bitcoin reserve," said Lummis. "Bitcoin is transforming not only our country but the world and becoming the first developed nation to use Bitcoin as a savings technology secures our position as a global leader in financial innovation. This is our Louisiana Purchase moment that will help us reach the next financial frontier."
The BITCOIN Act establishes a strategic Bitcoin reserve to serve as an additional store of value to bolster America's balance sheet and ensure the transparent management of Bitcoin holdings of the federal Government. Specifically, the legislation would:

• Establish a decentralized network of secure Bitcoin vaults operated by the United States Department of Treasury with statutory requirements ensuring the highest level of physical and cybersecurity for the nation's Bitcoin holdings.
• Implement a 1-million-unit Bitcoin purchase program over a set period of time to acquire a total stake of approximately 5% of the total Bitcoin supply, mirroring the size and scope of gold reserves held by the United States.
• Be paid for by diversifying existing funds within the Federal Reserve System and Treasury Department.
• Affirm self-custody rights of private Bitcoin holders and emphasize that the strategic Bitcoin reserve shall not infringe upon individual financial freedoms.
  

Source

Her proposals and public statements outline a vision in which the US treats Bitcoin similarly to other strategic assets—such as Gold—in its treasury holdings, which is getting an equal share of the world reserves under the US government control.

After the Trump Election, the idea gained traction:



The Bitcoin Strategic Reserve Would be enacted via a taxpayer-neutral operation, enabling the Government to acquire 1 Million Bitcoins, hodling it for at least 20 years:

• The reserve would be funded by marking the Fed's gold certificates to market value and selling them.
• The Government would use the surplus to buy Bitcoin without using Taxpayer money.
• The Department of Justice would transfer the 208,000 Bitcoin from the Silkroad Case to the SBR.
• The Government will buy 200,000 bitcoins annually for four consecutive years.
• The minimum hodling period would be of 20 years.

The "new" idea concerns repricing the Federal Reserve Certificates at mark-to-market valuations: the certificates were issued at a statutory gold price of $42.22/oz in 1973 and could now be valued at over $2,600/oz.



The gains obtained by this adjustment would enable spending without creating new debt, resulting in a neutral move regarding taxpayers' money.

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3. Implementation Details: how could it be done

There are a few ways to transfer Bitcoin to the Strategic Reserve:

• Transfer Bitcoins seized to the FED. The Department of Justice owns 208,000 bitcoins seized from the SilkRoad trial. The bulk of the SBR could be instated by transferring those coins to the FED.
• Open Market Purchases: The Government would buy the Bitcoin in the market, presumedly via a partnership with Coinbase. This would be the fastest way of obtaining bitcoins, yet the less efficient. For sure, the slippage in this, or the market movement against the buying pressure, would be the highest
• Strategic Partnership with US Miners: this would be an ingenuous way of doing so. The Government could buy the Bitcoins mined in the US at an average price. This would benefit the miners with a stable price and the Government limiting the market impact. The Government could also collect taxes from mining firms directly in BTC and offer these subjects grants to tilt their electricity balance toward carbon neutrality via renewable energy sources or even facilitate ERCOT-style agreements with local grids. This perfectly aligns with Donald Trump's visions on the industry
  
  :
  
  Creating this kind of partnership with the private sector would benefit both the parties involved and the industry as a whole.

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4. Price Expectations from a BSR launch

The launch of a Bitcoin Strategic reserve would have an enormous impact on market price.
This would happen through different mechanisms:

• Direct market impact: the buys would impact the market, directly affecting sellers. This could be somewhat mitigated through sophisticated buying strategies, as we have seen, but would dramatically change market microstructure anyway.
• Indirect Market Impact: The launch of the first BSR would have very strong signalling toward other sovereign authorities, opening the race for the second BSR announcement. There will be a flywheel spinning, attracting other National Bank toward Buying bitcoin, like today there is a race to buy Gold.
• Model-induced Buying: The opening of BSR-induced buying is necessary to propel Bitcoin in the next phase of growth, something that is necessary for all the bullish models around (be it Stock to Flow, Power Law or S-Curve approach) to see their prediction come true. As long as those models are not "negated," the framework is bullish.

Having said that, assessing the precise impact of a BSR is quite tricky, but of course, the effect would be gargantuan.

A couple of predictions:

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