President Trump’s executive order calling for the formation of a strategic Bitcoin (BTC) reserve and a crypto storage is a “central moment” for the industry, Investment Bank KBW said in a research report Friday.
The president ordered his administration to establish a strategic reserve in Bitcoin to keep the assets that have been seized by the government. He also called for a storage of other types of digital assets.
KBW noted that “the world’s largest superpower has embraced several leading blockchain protocols.”
Bitcoin is the right winner here as it is treated exclusively as a reserve asset, the report says. No Bitcoin will be sold and the government is also looking at opportunities to buy more of cryptocurrency.
KBW estimates that the government has about 198,000 bitcoin. It noted that approx. 55% of this stack will be returned to BitFinex, leaving a balance of about 86,000 tokens.
No details were given about how the government is planning to accumulate Bitcoin, but it could sell some of its more than $ 800 billion in gold reserves to finance further purchases of the crypto, KBW said.
The issue of US Ministry of Finance Bitbonds is another option, the bank said. These are government bonds that include a Bitcoin “Kicker” and can lower the government’s borrowing costs.
The government could also form partnerships with miners in the United States to receive Bitcoin -Royalties in exchange for tax breaks or incentives, the report added.
Read more: Market experts weigh in on Trump’s strategic Bitcoin reserve that takes $ 17B in potential sales from BTC
