US Bitcoin Strategic Reserve: How It Works and Why It Matters

Bitcoin just hit a new all-time high above $107,000, thanks to President-elect Donald Trump’s plan to create a U.S. bitcoin strategic reserve. But what exactly does that mean? Well, a strategic reserve is basically a stash of a key resource that can be used in emergencies or when supplies run low. For example, the U.S. has the Strategic Petroleum Reserve, which is full of emergency crude oil just in case something goes wrong.

Now, how would a U.S. strategic bitcoin reserve actually work? Well, it’s not clear yet if Trump can snap his fingers and make it happen, or if Congress needs to get involved. Some experts think Trump could direct the U.S. Treasury to use its Exchange Stabilization Fund to buy and hold bitcoin. And get this—there’s already about 200,000 bitcoins worth $21 billion in government hands from busting up bad guy operations.

But here’s the deal—Trump hasn’t said if the government would go out and buy more bitcoin on its own. Some folks think the U.S. could sell off some of its gold to make this happen. The benefits? Trump thinks a big stash of bitcoin would make the U.S. top dog in the global bitcoin race, especially against China. Plus, some think it could help the U.S. economy by beefing up the dollar and keeping taxes down.

However, there are skeptics who say bitcoin is too new and too unreliable to count on for the long haul. They also worry about hackers getting their hands on the stash. So, it’s a bit of a gamble, but we’ll have to wait and see if Trump’s bitcoin dream becomes a reality.