What if the US really bought 1 million BTC?

Bitcoin is being tossed around as a potential US reserve asset, like gold and foreign currencies

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ded pixto/Shutterstock modified by Blockworks

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The US government has four official reserve assets. Why shouldn’t bitcoin be the fifth?

If bitcoin-friendly Senator Cynthia Lummis gets her way, the US government will buy one million BTC ($67.7 billion) over five years to bolster Treasury coffers. A strategic bitcoin reserve managed by the US government.

President Donald Trump otherwise floated a plan to stop the US from selling anymore of its seized bitcoin at Bitcoin 2024 in Nashville. 

Trump would prefer that the US indefinitely holds its remaining 213,240 BTC ($14.85 billion), which authorities seized from a variety of criminal cases including Silk Road and the Bitfinex hack. 

Read more: Trump promises to halt government bitcoin sales, fire Gensler if elected

He didn’t go so far as to suggest an official strategic reserve in the same way that Lummis said she plans to in an upcoming Congress bill. 

If the US began to consider bitcoin an official reserve asset — which sadly feels unlikely — then as it stands, seized BTC would contribute 1.74% of the US’s total official reserves at current prices ($14.85 billion out of $854.3 billion).

Bitcoin does look right at home amongst the other US reserve assets

Gold is by far the US’ largest reserve asset. Or, more precisely, gold certificates. The US currently holds dollar-denominated certificates to almost 261.5 million fine troy ounces of gold. 

The Fed values those certificates at $42.22 per ounce, a statutory price it has kept by law as of 1973. Gold currently trades for nearly $2,400, giving the Fed’s gold certificates a market value of $608.35 billion.

There’s also $166.21 billion of claims to special drawing rights (SDR), a reserve asset maintained by the International Monetary Fund. 

SDR is a liquidity pool, currently worth $943 billion, from which countries can potentially pull. It consists of a basket of international currencies including the US dollar, euro, Chinese renminbi, yen and the sterling.

US reserves also contain $35.2 billion in foreign currency, denominated in the euro and yen, as well as an additional $29.6 billion that can be withdrawn from the IMF on short notice (separate from the SDR pool).

The US keeps strategic reserves of other valuable stuff, including oil (374.4 million barrels with a market value of $29.9 billion). But oil is not an official reserve asset like gold and foreign currencies.

Here’s what US reserves look like if Lummis’ plan was reality.

It’s hard to calculate looking forward, because that would require predicting the price of bitcoin. It is however possible to run her buying strategy over the past five years instead.

Bitcoin would be the third-largest US reserve asset in that case, behind gold and SDR. The orange line shows when buying would’ve started.

Had Lummis’ plan to buy one million BTC started five years ago — buying the same amount of BTC each month — then the US would now be sitting on $69.44 billion in bitcoin, including its seized criminal stash.

The real kicker is that the US would’ve spent “only” $31.4 billion to acquire one million BTC — which works out to be 120% unrealized profit.

It would still take some market luck. But perhaps Lummis is onto something.


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