Could Bitcoin Actually Become a US Reserve Asset?

There’s growing debate on whether Bitcoin should be added to the US’s reserve assets.

Senator Cynthia Lummis is advocating for the US to adopt a Bitcoin reserve strategy, suggesting that the government purchase one million BTC, equating to approximately $67.7 billion, over the next five years. This move could make Bitcoin a significant component of the US’s financial reserves.

Currently, the US holds four main types of reserve assets: gold, Special Drawing Rights (SDRs) from the International Monetary Fund (IMF), foreign currencies, and oil.

Gold remains the largest reserve asset, with the Federal Reserve holding certificates for nearly 261.5 million ounces of gold, valued at $608.35 billion. SDRs account for $166.21 billion, while foreign currency reserves total $35.2 billion, and oil reserves amount to $29.9 billion.

In contrast, former President Donald Trump has proposed a different approach. At the Bitcoin 2024 conference, Trump suggested that the US should retain its existing 213,240 BTC, valued at $14.85 billion, rather than selling them.

If Lummis’s proposal were implemented, it would significantly impact the composition of US reserves. Currently, if Bitcoin were to become an official reserve asset, the seized BTC would represent about 1.74% of the US’s total official reserves, calculated at $854.3 billion.

If Lummis’s proposal had been active over the past five years, the US could have accumulated $69.44 billion in Bitcoin, having spent $31.4 billion to acquire it—indicating a potential profit of 120% based on current Bitcoin values.

While the idea of Bitcoin becoming an official reserve asset remains speculative, the potential financial benefits suggest a growing interest in cryptocurrency as a component of national financial strategies.