Former President Donald Trump and Wyoming Republican Senator Cynthia Lummis have both proposed plans for the U.S. government to hold bitcoin, with supporters saying the asset could be seen as a buffer against volatility as markets tumbled on Monday, while critics raised concerns about bitcoin’s expanded role.
In the snow Released Last week, a draft bill was released that would direct the U.S. Treasury to purchase 1 million bitcoins over five years. Loomis said the government would hold the coins for at least 20 years unless they are sold to reduce debt. block.
Republican presidential candidate Trump has also said he would create a national Bitcoin vault if elected president later this year.
Independent presidential candidate Robert F. Kennedy Jr. made a similar promise last month. Bitcoin Bitcoin
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When he said he would do so in 2024 symptom An executive order directing the U.S. Treasury to purchase 550 bitcoins per day until it holds 4 million bitcoins.
About a week later, as the market fell, so did Bitcoin, with the cryptocurrency losing about 16% of its value. Price data of blocks. The ether fell further Dramatically On Monday, it was down about 23%.
“Short-term volatility is common across all stores of value, including gold and oil, and the U.S. holds significant reserves of both,” Loomis said in an emailed statement to The Block, adding that bitcoin’s reserves have a “fundamental advantage” in remaining strong.
“That’s why my bill takes a long-term view, requiring the U.S. Treasury to gradually acquire bitcoin over a five-year period and hold it for at least 20 years,” she said.
Is it a ‘buffer against market volatility’ or does it have ‘no strategic purpose?’‘
Cody Carbone, chief policy officer at the Chamber of Digital Commerce, said the bitcoin reserve proposed by Loomis is designed to better handle market fluctuations than traditional assets like stocks.
“Bitcoin has shown that it can quickly recover from market crashes, proving that it is a strong and reliable asset,” Carbone said in the message. “As more people and companies begin to use Bitcoin, it is increasingly viewed as a safe-haven investment, similar to gold. By integrating Bitcoin into national reserves, this proposal is expected to leverage Bitcoin’s long-term stability and decentralized nature, which can provide a buffer against market volatility and enhance the financial stability of the economy.”
However, some have criticized the idea of the U.S. Treasury holding Bitcoin.
Better Markets CEO Dennis Kelleher said oil and gold have a “strategic purpose.” Kelleher, who has been critical of cryptocurrencies in the past, said Bitcoin hoarding schemes would artificially inflate the token’s price.
“After 15 years of experimentation, there is no strategic purpose for a new financial product that has no use case and no legitimate social purpose. The only non-illicit uses for cryptocurrencies are gambling and speculation,” Kelleher said in an email to The Block.
Monday’s drop in the cryptocurrency markets confirms the credibility of cryptocurrencies and shows that they have reached some parity with traditional markets, said Mo Bella, a former senior adviser to President Joe Biden who is also a senior adviser to the cryptocurrency Unicoin.
“With the market volatility and Trump and Loomis suggesting that the Treasury hold Bitcoin reserves, this only amplifies my concerns about the volatility of non-crypto assets like Bitcoin, and the mystery of who is behind Bitcoin is a stark reminder that whatever Treasury money is involved should be banned,” Vela said.
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