Bitcoin Strategic Reserve Plan in the US Hits a Snag: Big Bull Senator Confesses

President Donald Trump’s proposal to create a U.S. strategic bitcoin reserve has sparked debate among lawmakers, with some crypto-friendly members of Congress expressing support while others question its feasibility.

Skeptics include Wyoming Republican Senator Cynthia Lummis, a fervent Bitcoin advocate who acknowledged that congressional support for such a venture is lacking.

Speaking at Bitcoin Investor Day in New York, Lummis acknowledged that there is resistance to the idea even within the Republican Party. He said the government is not yet ready for such an initiative, citing House Banking Committee Chairman Tim Scott, who has suggested delaying any move towards a bitcoin reserve.

Trump’s plan, announced via Truth Social on Sunday, outlines the creation of a “Crypto Strategic Reserve” as part of a sweeping executive order he issued on digital assets in January. The proposed reserve would include five cryptocurrencies: Bitcoin, Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA). Supporters argue that a state-run crypto reserve could provide financial benefits and act as a hedge against economic uncertainty.

The US currently maintains a variety of strategic stockpiles, including military and medical supplies reserves. While “stockpile” and “reserve” are sometimes used interchangeably, reserve typically refers to active management, including buying and selling assets. Notably, Trump’s January executive order established a working group to consider the creation of a digital asset stockpile, but did not explicitly call for a reserve. Trump’s latest message confirmed that it would be a reserve.

Supporters of the initiative argue that profits from cryptocurrency investments could help reduce the national debt. However, critics warn that digital assets are highly volatile and speculative, making them a risky addition to government assets.

Eswar Prasad, a professor of trade policy at Cornell University and author of The Future of Money, noted that while the U.S. has precedent for hoarding speculative assets like gold, Bitcoin presents unique challenges. Unlike gold, which has intrinsic value and is not significantly affected by U.S. government actions, the Bitcoin market can be significantly affected by federal intervention.

“Bitcoin is a relatively new asset and if the US accumulates large amounts, it will become a major player in this market,” Prasad said. “The difference between holding gold and holding Bitcoin is subtle but significant.”

*This is not investment advice.