Starting tomorrow, the Bitcoin 2024 conference kicks off in Nashville – and never before has a Bitcoin conference been so politically charged. Rumor has it that Donald Trump might announce on Saturday that Bitcoin will become the reserve currency of the USA.
Yes, the price of Bitcoin has risen nearly 20 percent since mid-July. The market has shown impressively how nonchalantly it has digested the 50,000 Bitcoin panic sale by the state of Saxony, which in itself is quite bullish news.
However, according to some American observers, all this is just noise. The big, the mighty, the megaton-heavy news is already in the starting blocks, and just the rumors are enough to drive the price up.
„This is no joke. My sources are credible.“
This week, the grand Bitcoin2024 conference begins in Nashville. Among many other prominent guests, former and potentially future US President Donald Trump will deliver a keynote address on Saturday.
“There is speculation that Trump will announce the establishment of a strategic Bitcoin reserve for the USA,“ writes Markus Thielen, CEO of analysis firm 10x Research, in an email to investors. „The USA could strategically integrate Bitcoin into its reserves to diversify its portfolio and reduce dependency on traditional stores of value such as gold and foreign currencies.“
According to Thielen, the USA already holds about 212,000 Bitcoins, roughly $15 billion, which it has seized from criminals. Unlike Saxony, where the attorney general’s office panic-sold the confiscated 50,000 Bitcoins in a fire sale, the USA has been holding onto its coins so far. Compared to the gold reserves of around $600 billion, the Bitcoins only constitute a small portion, Thielen explains.
If it were just Thielen speculating, we’d have airy rumors from a single analyst. But he is not alone in this. Lark Davis, another analyst and author of the Wealth Mastery Newsletter, asked: „Will Trump print dollars to buy Bitcoins?“
Dennis Porter, a lobbyist for the Satoshi Action Fund and well-connected in the political scene, went even further. He wrote on Twitter (now X) that Trump, according to anonymous sources, „will announce the establishment of a strategic Bitcoin reserve.“ He added, „This is no joke. My sources are credible.“ People didn’t think it was possible, „but at this point, it is already inevitable.“
Simon Dixon, an early adopter, author, and founder of BankToTheFuture, believes: „I am getting more and more confirmations that the rumors are true. Trump will announce a strategic Bitcoin reserve in Nashville.“
And David Bailey, the organizer of Bitcoin2024, tweets that there will be a new all-time high on Saturday. He doesn’t say why, but everyone knows what he means.
If it were true …
Of course, until Saturday, this is just one thing – a rumor. And even if Trump announces it, it doesn’t necessarily mean that he will implement it. He is in the midst of an election campaign, and promising to make Bitcoins a national reserve is a sure way to win over virtually all Bitcoiners, while the initiative can be easily delayed or canceled later for administrative or whatever reasons.
But let’s assume it’s true – what would it mean? First of all, no country can print money as well as the USA. Because the dollar is in demand as an export good worldwide, the US government could spread inflationary pressure across the globe – while reaping the benefits itself. The benefits in this case would be Bitcoins.
If Bitcoin rises in value during this process, it would support the dollar, enabling the printing of more dollars to buy even more Bitcoins, and so on. It has a bit of a pyramid scheme flavor – but public finances have always had that.
It would make sense
The dollar remains the uncontested most important currency in the world. However, there have long been ambitions, especially from Russia and China, to move away from the dollar.
The financial sanctions against Russia, indirectly also against China, and the confiscation of dollar accounts and government bonds in Russian possession, have tarnished the dollar’s status as the world’s currency. Countries like Saudi Arabia are already threatening to remove EU and US government bonds from their reserve basket.
The world could be heading towards a state where more and more countries are looking for new instruments to form a valuable reserve. Replacing US government bonds with those from China is equally nonsensical as replacing dollars with yuans. One is merely replacing one piece of paper with a worse one, and the reserves would be more diversified – but also less stable in value.
What remains would be stocks – such as indices or ETFs, which again leads back to the USA – or gold. However, gold is not new and may have already played out its potential as a store of value. And as a new, yet unused store of value, Bitcoin is the only real option.
In this regard, it would make political sense to already move a small portion of the reserves into Bitcoin. Just in case the others do it later. Whoever comes first will hold out their hand when the others also grind.
What is spoken becomes somewhat more real
Even though it would make sense for the USA to at least incorporate the Bitcoins they already own into the reserve, and even though the country, as a dollar issuer, has ideal conditions to build a massive Bitcoin reserve – these are just rumors, and very likely nothing more.
„I think it’s 10:1 against the USA using Bitcoin as a strategic reserve in the next four years,“ writes Ari Paul, a savvy Bitcoin investor. „That said, it would still be plausible for Trump to say this, and it would be very bullish for Bitcoin in the medium term.“
A purely campaign-driven statement from Trump could be so bullish that it ignites the next rally – simply because something is said aloud, and because what is spoken is a bit more real than what is only thought.