Senator Lummis Proposes Fed Sales of Gold to Fund Strategic BTC Reserves: Bloomberg
According to the latest Bloomberg report, Wyoming Republican Senator Cynthia Lummis proposed selling some of the Federal Reserve’s gold reserves to purchase 1 million bitcoins to create a strategic bitcoin reserve. The senator, an ally of Donald Trump, has a plan to fill the president-elect’s proposed strategic Bitcoin reserve without adding to the government deficit.
The bill requires the United States to acquire 1 million bitcoins, equivalent to nearly 5% of outstanding tokens. Cynthia Lummis estimates it will cost around $90 billion at current prices, but that figure could rise further if markets anticipate government intervention.
“We already have financial assets in the form of gold certificates that can be converted to Bitcoin,” Lummis told Bloomberg. “So the impact on the U.S. balance sheet is very neutral.”
Under Lummis’ bill, cryptocurrencies would be held for at least 20 years and the estimated rise in value would help reduce the national debt.
The uphill battle you will face
Despite industry hopes that this will be the most cryptocurrency-friendly Congress ever, some market observers believe Lummis’ bill, which currently has no co-sponsors, faces an uphill battle.
“There are still government funds at stake, and Bitcoin has not shown itself to be a particularly stable asset,” said Jennifer J. Schulp, director of financial regulation studies at the Cato Institute’s Center for Currency and Financial Alternatives. She also added, “This bill requires senators and representatives who may not understand cryptocurrencies to take a much bigger leap of faith in terms of the long-term viability of cryptocurrencies.”
Novogratz doubts the US creating strategic BTC reserves.
Michael Novogratz, CEO of Galaxy Digital, believes it is unlikely that the United States will establish a Bitcoin strategic reserve. But if that happens, Novogratz predicted the price could rise to $500,000, as other countries will feel the need to build similar stockpiles.
Lummis first unveiled the bill at the Bitcoin 2024 conference after Trump announced his ambition to create government-owned Bitcoin reserves. Following Trump’s highly anticipated victory, the cryptocurrency market surged significantly with Bitcoin hitting a new high above $93,000.
Lummis is optimistic that the BITCOIN bill, which stands for Enhancing Innovation, Technology and Competitiveness through Nationwide Investment Optimization, will gain support in the next Congress. She noted that Trump has already endorsed the reserve idea and that his closest advisors include people who understand Bitcoin and its future role.