When is the earliest that the U.S. "Bitcoin Strategic Reserve" can be implemented? These key time points are worth paying attention to
Since early November, when Trump's victory was "settled," the crypto market, especially Bitcoin, has entered a strong expectation of a "U.S. Bitcoin Strategic Reserve."Author: Mu Mu, Plain Language Blockchain
Since the early November "certainty" of Trump's election victory, the crypto market, especially Bitcoin, has entered a strong expectation of the "U.S. Bitcoin Strategic Reserve." It is clear that the market will focus heavily on the implementation of this commitment after Trump takes office in 2025. Some 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 its progress, anticipate possible implementation timelines, and prepare accordingly.
01. Latest Developments
The "Bitcoin Strategic Reserve" has actually been proposed and discussed before the U.S. presidential election. Senator Cynthia Lummis proposed the "Bitcoin Act of 2024" on July 31, 2024, which suggests purchasing 200,000 Bitcoins annually, reaching a total of 1 million within five years.
Subsequently, during the campaign, Trump promised to become the "crypto president" at a Bitcoin conference in the crypto industry, and the industry hopes 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 it is a non-official organization focused on Bitcoin policy research, but it remains one of the important think tanks for policymakers on Bitcoin-related issues) recently released a draft of an executive order, attempting to provide reference opinions for Trump's "Bitcoin Strategic Reserve" executive order framework. This draft explicitly suggests allocating 1%-5% of national debt assets for purchasing Bitcoin to form a long-term reserve, led by the Treasury Department with cooperation from the Federal Reserve, gradually establishing reserves, etc.
On December 19, 2024, Federal Reserve Chairman Jerome Powell (expected to continue serving after Trump takes office) expressed cautious views at a press conference, stating that the Federal Reserve has no intention of participating in any government plans to hoard Bitcoin, as such matters fall within the purview of Congress, and the Federal Reserve is not seeking to change existing laws to allow for Bitcoin holdings.
From the latest situation, although the Federal Reserve Chairman holds a conservative opinion, under favorable conditions such as the crypto-friendly U.S. Treasury Secretary nominated by Trump and the rapid issuance of "presidential executive orders" after taking office, these will not affect Trump's team from continuing to promote the plan to incorporate Bitcoin into the U.S. strategic reserves.
02. Earliest Implementation Timeline
Given that the "Bitcoin Strategic Reserve" is not a small topic and cannot be executed immediately on a whim by the U.S. president, we will not see its implementation right away. According to the current administrative order or legislative process in the country, if Trump wants to implement the Bitcoin strategic reserve, he would need to have the cryptocurrency committee conduct policy research and feasibility assessments immediately after taking office, formally propose a plan upon completion, and then proceed through two paths:
Path One: Presidential Executive Order (Earliest in the second half of 2025)
Issuing an executive order directly after taking office is the quickest path, as it can bypass resistance from the Federal Reserve and Congress. It would also reference the draft provided by the "Bitcoin Policy Institute," instructing the U.S. Treasury Department to use the Exchange Stabilization Fund (ESF) to directly allocate Bitcoin.
However, while this method is quick and convenient, it has side effects. Although the Treasury's Exchange Stabilization Fund does not require Congressional approval, it can be investigated and legislatively restricted by Congress. An executive order can also be overturned and modified by the next president, so its durability and stability are not as strong as legislation.
Path Two: Congressional Legislation (Earliest in the second half of 2026)
If a more stable legislative path is chosen, it will require a longer process. After the policy research and feasibility assessment by the cryptocurrency committee, the bill needs to be submitted to Congress and reviewed by the Senate Banking Committee, then passed by the Senate, House of Representatives, and signed by the president before it can be officially completed.
This process may experience various back-and-forths and is relatively complex, as many conservative lawmakers are likely to raise objections and obstruct progress. Therefore, while this path can lead to a lasting and stable bill, it will take a long time, likely not being implemented until the second half of 2026 or 2027.
Recently, news has emerged that the crypto industry is pushing Trump's team to issue an executive order on his first day in office next month, initiating his promised cryptocurrency policy reforms and helping to promote the mainstreaming of crypto. If this is done through an executive order, we might see the implementation of the Bitcoin strategic reserve as early as mid-2025.
03. Several Important Time Points
During the "process" of the relevant executive orders or bills regarding the Bitcoin strategic reserve, the following time points may significantly impact the market:
1) January 20, 2025, around Trump's inauguration
Trump will officially take office on this day, and from this time, he can formally begin to "issue orders." This time point will mark the beginning of the new president's governance, and relevant policy directions may gradually emerge. The market will closely watch the inaugural speech and the release of early executive orders. This inauguration is expected to be quite lively, as Trump has invited many guests, and the financial markets will pay close attention.
2) Mid-2025, completion of the policy research phase
Based on the timeline, the policy research by the cryptocurrency committee is expected to be completed and a feasibility report and draft regarding Bitcoin reserves proposed by mid-2025. Subsequently, Trump can sign the executive order, marking the official introduction of the "Bitcoin Strategic Reserve."
3) Second half of 2025 to early 2026, implementation details and potential Congressional tug-of-war
After signing the relevant executive orders and determining the related framework, the U.S. Treasury Department, Federal Reserve, and other relevant departments will begin to formulate specific implementation details, including Bitcoin procurement methods, reserve ratios, asset management rules, etc., and then begin formal implementation.
During this period, it is unlikely to proceed smoothly, as opposing members of Congress will join in to obstruct and create delays.
Finally, if everything goes smoothly 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 crypto market.
04. Conclusion
The path to the "Bitcoin Strategic Reserve" seems full of twists and turns and is not something that can be implemented overnight; the earliest it could happen is in six months. Nevertheless, regardless of the outcome, Trump's "U.S. Bitcoin Strategic Reserve" has created positive expectations and also "set a template" for central banks, financial institutions, and publicly listed companies around the world 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 points and be ready to adjust our responses at any time.
