Bitcoin’s meteoric rise in 2025 has been bolstered by President-elect Donald Trump’s pro-crypto policies, including proposals to create a federal bitcoin reserve. While some experts champion the idea as a transformative step for the United States, others remain skeptical of its practicality and risks.
Speaking at a conference in July, Trump advocated for retaining the country’s bitcoin holdings, calling it a “permanent national asset to benefit all Americans.” He suggested that a bitcoin reserve could position the U.S. as a global leader in the cryptocurrency space while offering a potential tool for addressing national debt.
Currently, the U.S. government owns approximately $20 billion in bitcoin, largely acquired through legal seizures, according to Arkham Intelligence. While federal authorities have historically auctioned off these holdings, Trump has proposed halting such sales to create a “core” bitcoin stockpile.
“For too long, our government has violated the cardinal rule that every bitcoiner knows by heart: Never sell your bitcoin,” Trump remarked in July.
Bitcoin’s price has surged over 100% this year, with proponents of a federal reserve arguing that restricting supply by retaining holdings could support higher prices, benefiting investors.
“If you constrain supply in the overall, real-time market, then it does help to not suppress the price,” said Seoyoung Kim, author of DeFi For Dummies and finance professor at Santa Clara University.
Supporters of the concept, including Senator Cynthia Lummis (R-Wyo.), have proposed a more ambitious strategy. Lummis introduced a bill advocating for the acquisition of 1 million bitcoin—roughly 5% of all tokens in circulation—to be held for at least 20 years. She argued this reserve could serve as a long-term store of value, help reduce the $36 trillion national debt, and strengthen the U.S. dollar.
“While there may be short-term volatility, over the long term a bitcoin reserve like this will serve as an important and stable store of value,” Lummis wrote in The Wall Street Journal.
However, critics warn of the risks associated with such a strategy. Bitcoin’s notorious volatility could expose taxpayers to financial losses if prices plummet. Owen Lau, senior analyst at Oppenheimer & Co., expressed doubts about the feasibility of funding a strategic reserve without Congressional approval.
“There just isn’t enough support for creating something like this,” Lau said. “Taking it a step further to actively buy and sell bitcoin would be quite risky and harder to justify to the public.”
Federal Reserve Chair Jerome Powell dismissed the possibility of the central bank holding bitcoin, citing legal restrictions. “We’re not allowed to own bitcoin. The Federal Reserve Act says what we can own, and we’re not looking for a law change,” Powell stated at a recent news conference.
While Trump’s crypto-friendly administration signals a significant shift in policy, experts remain divided on whether a federal bitcoin reserve could truly deliver on its promises or if its risks outweigh the potential benefits.
