The U.S., with 8,000+ tons of gold reserves, may create a Bitcoin reserve as Senator Lummis urges converting gold into Bitcoin.
To create a Bitcoin reserve, Senator Cynthia Lummis of Wyoming is pushing for the US Treasury Department to convert some of its gold assets into Bitcoin.
The immediate impact on the US government’s balance sheet would be “neutral,” Lummis told Bloomberg if US Treasury gold certificates were converted into Bitcoin rather than spending about $90 billion to buy the cryptocurrency at current market levels.
Although the US Senator has earlier suggested that the US Treasury should sell some of its holdings to raise more Bitcoin reserve, he never made it clear which assets should be liquidated.
Senator Lummis stated that the creation of the Strategic Bitcoin Reserve was crucial, “As families across Wyoming struggle to keep up with soaring inflation rates and our national debt reaches new and unprecedented heights,” during the introduction of the bill to the Senate.
Resolving Criticism Of Bitcoin Reserve
One million bitcoins, or 5% of the entire quantity, will be acquired and held for 20 years as part of Senator Lummis’ Bitcoin strategic reserve proposal.
As previously stated, at current market pricing, this ambitious ambition would cost almost $90 billion.
Anthony Pompliano, an investor and asset manager, recently asserted that sovereign countries are engaged in a global competition for Bitcoin and that the multibillion-dollar price tag is a small price to pay:
“The national debt increased by $850 billion in the last 90 days. If we were to try to put that same $850 billion into Bitcoin, that is about half of the current market cap. So, we’re talking about 50-100 billion dollars — small rounding errors when it comes to government spending. And I think that it is well worth the risk-reward.”
Mike Novogratz, the founder and CEO of Galaxy Digital, recently stated that he did not believe President-elect Donald Trump would establish a Bitcoin strategic reserve.
However, Novogratz anticipates that the price of Bitcoin would rise to $500,000 per BTC if the strategic reserve is created under the incoming Trump administration.
