Trump’s Sovereign Wealth Fund Order Sparks Bitcoin Speculation
President Donald Trump’s latest executive order (EO) directing the creation of a U.S. sovereign wealth fund has ignited speculation about the government’s potential involvement in Bitcoin. Wyoming Senator Cynthia Lummis, a known Bitcoin advocate, suggested that the move could open the door for the United States to invest in the leading cryptocurrency.
The EO, signed on February 3 during a press event in the Oval Office, instructs Treasury Secretary Scott Bessent and Commerce Secretary nominee Howard Lutnick to begin the process of establishing the fund. Bessent stated that the initiative would be enacted “within the next 12 months” and would focus on “monetizing the asset side of the U.S. balance sheet.” While the executive order does not explicitly mention Bitcoin or other digital assets, the potential implications have drawn attention from industry advocates.
Could Bitcoin Become a Strategic Reserve Asset?
Following the announcement, Lummis took to social media to highlight the sovereign wealth fund’s potential for Bitcoin acquisitions. Crypto advocate Wayne Vaughan echoed her sentiment, noting that both Bessent and Lutnick have expressed favourable views on Bitcoin in the past. This has led to speculation that the U.S. government may consider Bitcoin as part of its investment strategy, aligning with broader efforts to integrate digital assets into mainstream financial policies.
The idea of a national Bitcoin reserve has been floated by several crypto proponents, who argue that holding Bitcoin could serve as a hedge against inflation and a strategic asset in the evolving global financial system. Trump, during his campaign, had proposed policies favourable to Bitcoin, including establishing a national BTC stockpile and halting the development of a U.S. central bank digital currency (CBDC).
Legal and Economic Challenges Loom
Despite the enthusiasm surrounding the executive order, Trump’s reliance on executive actions has already faced legal pushback. A federal judge recently blocked his attempt to revoke birthright citizenship, citing constitutional concerns. This raises questions about whether the sovereign wealth fund EO—and any potential Bitcoin investments—could encounter similar legal scrutiny.
Additionally, Trump’s recent executive order imposing tariffs on imports from China, Canada, and Mexico has had significant financial market repercussions, including a sharp decline in crypto prices. The move resulted in over $2.24 billion in liquidations across crypto markets within 24 hours, highlighting the growing interconnection between traditional finance (TradFi) and digital assets. Wintermute CEO Evgeny Gaevoy noted that these downturns were driven by macroeconomic events rather than manipulation within the crypto space.
Crypto Market Turmoil and Regulatory Pressure
The speculation surrounding the sovereign wealth fund comes amid heightened regulatory scrutiny of the crypto industry. The U.S. Commodity Futures Trading Commission (CFTC) is currently investigating crypto exchange Crypto.com and prediction market platform Kalshi over Super Bowl-related wagering contracts. The probe underscores the regulatory uncertainties that continue to shape the digital asset landscape.
A Shift in U.S. Crypto Policy?
Trump’s evolving stance on digital assets contrasts sharply with the regulatory uncertainty that marked previous administrations. By signalling a potential shift toward integrating Bitcoin into national financial strategies, the executive order could mark a pivotal moment for the U.S. crypto industry. However, without explicit confirmation of Bitcoin’s role in the sovereign wealth fund, speculation remains just that—speculation.
As the Treasury Department and Commerce Department begin implementing the EO, all eyes will be on whether Bitcoin finds a place in the U.S. government’s investment strategy or if this remains merely a talking point among crypto advocates.
