Bitcoin Hits Record High as Trump Proposes U.S. Strategic Bitcoin Reserve

Bitcoin surged past $107,000 on Monday after President-elect Donald Trump reaffirmed his plan to create a U.S. strategic bitcoin reserve. Inspired by the Strategic Petroleum Reserve, the proposed stockpile would act as a safeguard during economic disruptions. Trump suggested the government’s 200,000 seized bitcoins, worth $21 billion, could serve as the starting point, though whether additional purchases would require Congressional approval remains unclear.

Proponents argue a bitcoin reserve would strengthen the U.S. economy, reduce national debt, and maintain the dollar’s dominance globally, especially against competition from China. Senator Cynthia Lummis introduced a bill calling for annual bitcoin purchases over five years to build a one-million-token reserve, funded through profits from Federal Reserve deposits and gold holdings. Supporters believe this would protect against inflation and enhance U.S. leverage over adversaries.

Critics warn that bitcoin’s volatility, lack of intrinsic value, and vulnerability to cyberattacks pose significant risks. They caution that government bitcoin purchases or sales could heavily impact prices, and the long-term growth of bitcoin remains uncertain. Despite these concerns, the proposal has energized crypto markets and amplified discussions about bitcoin’s role in the global economy.

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