Of the some 8,000 tons of gold traded annually, the United States holds over 8,000 tons in its reserves to lead the global gold holdings.
Wyoming Senator Cynthia Lummis is calling on the Treasury Department to tap some of that $1 trillion in reserves and put a portion of it into Bitcoin in order to create a strategic Bitcoin reserve.
Bitcoin Reserve Advocated by Lummis Amid Inflation, Debt
Lummis also told Bloomberg that if the Treasury could do the same thing, it could exchange gold certificates for Bitcoin without affecting the government’s balance sheet. This would get around the estimated $90 billion necessary to buy Bitcoin entirely at prices today.
But in September last year, Lummis suggested that the Treasury diversify its holdings to include BTC, though without naming which assets to liquidate. She indicated at the time that the Strategic BTC Reserve bill was urgent in the wake of rising inflation and the ballooning national debt.
The plan is to buy up 1 million Bitcoin or 5 percent of the total supply, good for 20 years. About $90 billion would be needed to achieve this goal. The initiative was described by investor Anthony Pompliano as being part of a global race among governments to get BTC, and he wrote on Twitter the investment was 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.”
But under the incoming Trump administration, Galaxy Digital CEO Mike Novogratz was skeptical that the ambitious plan could come to fruition. But he predicted the price might rocket to $500,000 per coin if the reserve is created.
