Since the early November announcement of Trump's election victory, the cryptocurrency market, especially Bitcoin, has entered a strong expectation of the 'U.S. Bitcoin Strategic Reserve'. Clearly, the market will focus heavily on the implementation of this commitment after Trump takes office in 2025. Analysts have stated that this will break the Bitcoin bull-bear cycle, meaning that any 'interruption' in the future could lead to severe market fluctuations. What we can do now is to pay attention to the advancement dynamics, estimate possible implementation timelines in advance, and prepare accordingly.
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Latest Developments
The issue of the 'Bitcoin Strategic Reserve' has actually been proposed and discussed before the U.S. presidential election. Senator Cynthia Lummis proposed the (Bitcoin Strategic Reserve Act) on July 31, 2024, suggesting the purchase of 200,000 Bitcoins annually, reaching 1 million within five years.
Subsequently, during the campaign, Trump promised to become the 'crypto president' at a Bitcoin conference in the cryptocurrency industry, with the industry hoping he will fulfill this promise by creating a Bitcoin inventory through executive orders, ensuring that the industry can access banking services, and establishing a cryptocurrency committee.
On December 17, 2024, the Bitcoin Policy Institute (BPI) (note that this is a non-official organization but a non-profit organization focused on Bitcoin policy research; it remains one of the important think tanks for decision-makers on Bitcoin-related issues) recently published a draft of an executive order, attempting to provide reference opinions for the framework of Trump's 'Bitcoin Strategic Reserve' executive order. This draft clearly proposes: recommending allocating 1%-5% of Treasury assets to purchase Bitcoin to form a long-term reserve, led by the Treasury, with collaboration from the Federal Reserve, gradually establishing reserves, etc.
On December 19, 2024, Federal Reserve Chairman Powell (expected to continue serving his term after Trump's inauguration) expressed cautious views at a press conference, stating that the Federal Reserve has no intention to participate in any government accumulation of Bitcoin. Such issues fall within the purview of Congress, and the Federal Reserve is not seeking to change existing laws to allow Bitcoin holdings.
From the latest situation, although the Federal Reserve Chairman holds conservative opinions, under favorable conditions such as the appointment of a crypto-friendly U.S. Treasury Secretary by Trump and the rapidly issued 'presidential executive order', these will not hinder Trump's team from continuing to push for the inclusion of Bitcoin in the U.S. strategic reserves.
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Earliest implementation time
Given that the 'Bitcoin Strategic Reserve' is not a small topic and cannot be immediately executed on a whim by the U.S. President, we will not see its implementation immediately. Based on the current U.S. executive order or legislative process, if Trump wants to implement the Bitcoin Strategic Reserve, he should immediately direct the cryptocurrency committee to conduct policy research and feasibility assessments after taking office, formally proposing a plan afterwards. Two paths can then be followed:
Path 1: Presidential Executive Order (as early as the second half of 2025)
The fastest path for Trump to issue an executive order directly after taking office is because it can bypass the conservative and opposing resistance from institutions like the Federal Reserve and Congress. This is also based on the draft provided by the 'Bitcoin Policy Institute', directing the U.S. Treasury to use the Exchange Stabilization Fund (ESF) to allocate Bitcoin directly.
However, although this method is quick and convenient, it also has side effects. The Treasury's Exchange Stabilization Fund can be investigated and legislatively restricted by Congress even though it does not require congressional approval. Executive orders can also be overturned and modified by the next president, so their permanence and stability are not as good as legislation.
Path 2: Congressional Legislation (as early as the second half of 2026)
If a more stable legislative path is taken, it will require a longer process. The bill resulting from the cryptocurrency committee's policy research and feasibility assessment must first be submitted to Congress and reviewed by the Senate Banking Committee, then passed through the Senate, House of Representatives, and signed by the President before legislation can be officially completed.
This process may experience various pulls and is relatively complex; after all, many conservative lawmakers will certainly raise objections and obstruct progress. Therefore, although this path can lead to a lasting, stable bill, it will take a long time, potentially not coming to fruition until the second half of 2026 or 2027.
Recently, it has been reported that the cryptocurrency industry is pushing Trump's team to issue an executive order on his first day in office next month to initiate the promised cryptocurrency policy reform and help promote the mainstreaming of cryptocurrencies. If achieved through an executive order, we may see the implementation of the Bitcoin Strategic Reserve as early as mid-2025.
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Several important time nodes
During the 'process' of related executive orders or bills regarding the Bitcoin Strategic Reserve, the following time nodes may have significant impacts on the market:
1) January 20, 2025, around the time of Trump's inauguration
Trump will officially take office on this day, and from this point on, he can formally begin to issue commands. This time node will mark the beginning of the new president's administration, with related policy directions likely to gradually surface. The market will closely watch the inauguration speech and the release of early executive orders. Trump has invited many guests to this inauguration ceremony, which is expected to be quite lively, and financial markets will pay close attention.
2) By mid-2025, complete the policy research phase
Based on the timeline, the policy research of the cryptocurrency committee is expected to be completed and a feasibility report and draft regarding the Bitcoin reserve may be proposed by mid-2025. Subsequently, Trump could sign the executive order, marking the official introduction of the 'Bitcoin Strategic Reserve'.
3) From the second half of 2025 to early 2026, implementing detailed rules and potential congressional pulls
Signing related executive orders and determining relevant frameworks, the U.S. Treasury, Federal Reserve, and other related departments will need to begin formulating specific implementation details, including methods of Bitcoin procurement, reserve ratios, asset management rules, etc., and then officially implement them.
During this period, it is unlikely to go smoothly; opposing members of Congress will join the obstruction efforts and pull back and forth.
Ultimately, if all goes well and the Bitcoin reserve strategy brings objective 'benefits', it may further promote legislation in the future, which will have a profound impact on the landscape of the cryptocurrency market.
The road to the 'Bitcoin Strategic Reserve' seems full of twists and turns, and it is not something that can be realized in just one or two days; at the earliest, it will take at least half a year. Nevertheless, Trump's 'U.S. Bitcoin Strategic Reserve' has brought positive expectations while also 'setting a precedent' for central banks, financial institutions, and publicly traded companies worldwide to research and explore the feasibility of Bitcoin reserves. Although there may still be many uncertainties regarding policy details and the final implementation timeline, we still need to follow and pay attention to key time nodes and be ready to make adjustments.