When will the US "BTC Strategic Reserve" be implemented at the earliest? Pay attention to several time points

Source: Vernacular Blockchain

Since the "finality" of Trump's victory in early November, the crypto market, especially Bitcoin, has entered a strong expectation of "US Bitcoin Strategic Reserve". Obviously, the market will focus on the implementation of this promise after Trump takes office in 2025. Some analysts bluntly stated that this matter will break the bull-bear cycle of Bitcoin, that is, any "episode" in the future may cause turbulent market conditions. What we can do now is to pay attention to its advancement, estimate the possible landing time nodes in advance, and make corresponding preparations.  

01 Latest Developments

The "Bitcoin Strategic Reserve" was actually proposed and discussed before the US presidential election. Senator Cynthia Lummis proposed the "US Bitcoin Strategic Reserve Act" (BITCOIN Act of 2024) as early as July 31, 2024. The bill proposes to purchase 200,000 bitcoins each year, reaching 1 million within five years.

Later, during the campaign, Trump promised to become the "cryptocurrency president" in a speech at the Bitcoin Conference of the crypto industry. The industry hopes that he will fulfill his promise to create a Bitcoin inventory through executive orders, ensure that the industry can obtain banking services, and create a cryptocurrency committee.

On December 17, 2024, the Bitcoin Policy Institute (BPI) (Note, it is a non-profit organization focused on Bitcoin policy research, but it is still one of the important think tanks for decision makers on Bitcoin-related issues) recently released a draft executive order, trying to provide reference opinions for Trump's "Bitcoin Strategic Reserve" executive order framework. This draft clearly states: It is recommended that 1%-5% of Treasury assets be used to purchase Bitcoin to form a long-term reserve. Led by the Treasury Department and coordinated by the Federal Reserve, reserves will be gradually established.

On December 19, 2024, Federal Reserve Chairman Powell (who is expected to continue to perform his duties after Trump takes office) expressed cautious views at a press conference. Powell said that the Federal Reserve has no intention of participating in any government plan to hoard Bitcoin. Such issues fall within the scope of Congress’s responsibilities, and the Federal Reserve has not sought to change existing laws to allow the holding of Bitcoin.

From the latest situation, although the Federal Reserve Chairman holds a conservative opinion, but under favorable conditions such as Trump’s nomination of a crypto-friendly U.S. Treasury Secretary and the “Presidential Executive Order” issued quickly after taking office, these will not affect the Trump team’s plan to continue to promote the inclusion of Bitcoin in the U.S. strategic reserves.

02 Fastest implementation time

Given that the "Bitcoin strategic reserve" is not a small issue, and it is not something that the US president can immediately implement on a whim, we will not see its implementation immediately. Judging from the country's current executive orders or legislative processes, if Trump wants to implement the Bitcoin strategic reserve, he should immediately ask the Cryptocurrency Committee to conduct policy research and feasibility assessment after taking office, and formally propose a plan after completion, which can then be carried out through two paths:

Path 1: Presidential Executive Order (as early as the second half of 2025)

The fastest way for Trump to directly issue an executive order after taking office is to bypass conservative and opposing resistance from the Federal Reserve and Congress. It also refers to the draft provided by the "Bitcoin Policy Institute" to instruct the US Treasury to use the Exchange Stabilization Fund (ESF) to directly allocate Bitcoin.

However, although this method is quick and convenient, it also has side effects. Although the Treasury Department's foreign exchange stabilization fund does not require congressional approval, it can be investigated and restricted by Congress. Executive orders can also be overturned and modified by the next president, so its durability and stability are not as good as legislation.

Path 2: Congressional legislation (as early as the second half of 2026)

If a more stable legislative path is adopted, a longer process will be required. After the Cryptocurrency Committee conducts policy research and feasibility assessment, the bill must be submitted to Congress and submitted to the Senate Banking Committee for deliberation, and then signed and passed by the Senate, the House of Representatives and the President before the legislation can be formally completed.

This process may go through various repeated pulls and is relatively complicated. After all, many conservative members will definitely raise objections and obstructions. Therefore, although a lasting and stable bill can be obtained through this path, it will take a long time, and it may not be implemented until at least the second half of 2026 to 2027.

Recently, the crypto industry is pushing Trump's team to issue an executive order on the first day of his inauguration next month to launch the cryptocurrency policy reform he promised and help promote crypto mainstreaming. If the executive order is passed, the implementation of the Bitcoin strategic reserve may be seen as early as mid-2025.

03 Several important time nodes

During the "process" of the relevant executive orders or bills of the Bitcoin strategic reserve, the following time nodes may have a significant impact on the market:

1) January 20, 2025, around Trump's inauguration

Trump will officially take office on this day, and from this time on, Trump will be able to officially start "issuing orders". This time node will mark the beginning of the new president's administration, and relevant policy trends may gradually surface. The market will pay close attention to the inaugural address and the issuance of early executive orders. Trump invited many guests to the inauguration ceremony, which is expected to be quite lively, and the financial market will also pay close attention.

2) Completion of the policy research phase in mid-2025

According to the time calculation, the policy research of the Crypto Committee will be completed as early as the first half to mid-2025 and a feasibility report and draft on Bitcoin reserves will be proposed. Trump can then sign an executive order. It marks the official launch of the "Bitcoin Strategic Reserve".

3) From the second half of 2025 to the beginning of 2026, implementation details and potential congressional tug-of-war

After signing relevant executive orders and determining relevant frameworks, the U.S. Treasury Department, the 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 officially implement them.

During this period, it should not be too smooth, and opposing members of Congress will join the obstruction and pull repeatedly.

Finally, if everything goes well and the Bitcoin reserve strategy brings objective "benefits", legislation may be further promoted in the future, which will have a far-reaching impact on the crypto market structure.

04 Summary

The road to "Bitcoin strategic reserve" seems to be full of twists and turns. It is not something that can be implemented in a day or two. It will take at least half a year. But no matter what, Trump's "US Bitcoin Strategic Reserve" has brought good expectations, and it has also "laid a good example" to drive central banks, financial institutions, and listed companies in various countries to study and explore the feasibility of Bitcoin reserves. Although there may still be many uncertainties in the policy details and the final implementation time, we still need to follow up and pay attention to key time nodes and make adjustments at any time.