- Senator Lummis aims to fund a U.S. Bitcoin reserve by selling part of the Federal Reserve’s gold holdings, targeting the acquisition of 1 million Bitcoins, which could strengthen national assets and reduce U.S. debt if Bitcoin appreciates.
- Despite support from Trump and potential market enthusiasm, Lummis’ plan faces resistance in Congress and concerns over Bitcoin’s volatility. If successful, the initiative could drive global Bitcoin adoption and raise its price significantly.
Republican Senator Cynthia Lummis of Wyoming has introduced a bold proposal to fund a U.S. Bitcoin reserve by selling part of the Federal Reserve’s gold holdings. The plan aims to convert gold into one million Bitcoins, or around 5% of the total supply, at an estimated cost of $90 billion.
Following her recent confirmation, as shared by CNF, her Strategic Bitcoin Reserve plans after Trump’s victory, according to a Bloomberg report, Lummis plans to push forward with a bill to do exactly that when the new Congress is seated next year. She further added that:
The bill calls for the U.S. to acquire 1 million Bitcoin, representing nearly 5% of the outstanding tokens. The purchases would cost about $90 billion at current market prices, though the sum would likely increase if the bill passes and investors front-run the government’s buying.
This approach would use existing financial assets without increasing the national deficit, allowing for a strategic Bitcoin reserve without burdening taxpayers. Lummis, a Trump ally, believes this move could strengthen national assets and potentially help reduce U.S. debt if Bitcoin appreciates over time.
Hurdles in Congress and Skepticism in Financial Circles
Currently, as reported, Lummis lacks co-sponsors for her bill, indicating resistance even in what may become a crypto-friendly Congress. Market experts also express concerns, with some pointing out the potential difficulty in convincing lawmakers to support such substantial Bitcoin investments.
Although Lummis’ proposal aligns with Trump’s pro-crypto stance, the plan faces a challenging path in Congress. Critics argue that Bitcoin’s volatility makes it a risky national asset, and Jennifer Schulp from the Cato Institute warns that it would demand a significant “leap of faith” from legislators as well.
Market Reactions and Global Implications
If the U.S. establishes a Bitcoin reserve, industry leaders like Galaxy Digital’s Michael Novogratz predict it could spark a global wave of similar national reserves, potentially driving Bitcoin’s price to $500,000. Lummis remains hopeful that Trump’s endorsement and his advisors’ crypto expertise will help sway Congress.
The “BITCOIN” bill (Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide) symbolizes her vision for a forward-looking U.S. financial strategy anchored by digital assets.
Concerning the Bitcoin price update during this development, it seems slightly affected to some extent, as the price is currently trading at $88,293.34, having declined by 1.65% in the past day and increased by 16.09% in the past week. See the BTC price chart below.
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