Senator Lummis says Treasury should convert gold for Bitcoin reserve
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The United States government has the highest gold reserves in the world, with over 8,000 tons of the precious metal on its balance sheet.
Wyoming Senator Cynthia Lummis is advocating for the United States Treasury Department to convert a portion of its gold holdings into Bitcoin to establish a Bitcoin strategic reserve.
Lummis told Bloomberg that by converting gold certificates held by the US Treasury into Bitcoin, the immediate effect on the US government’s balance sheet would remain “neutral,” as opposed to spending approximately $90 billion to purchase the Bitcoin at current market prices.
The US Senator previously argued that the US Treasury should convert a portion of its assets to purchase Bitcoin for the strategic reserve, but never specified which of the Treasury’s holdings should be sold to acquire more of the digital currency.
When the Strategic Bitcoin Reserve bill was introduced to the Senate, Senator Lummis remarked that establishing the reserve was paramount, “As families across Wyoming struggle to keep up with soaring inflation rates and our national debt reaches new and unprecedented heights.”
Overcoming objections to a BTC strategic reserve
Senator Lummis’ Bitcoin strategic reserve initiative includes provisions to acquire 5% of the total Bitcoin supply — 1 million BTC — to be held for 20 years. As mentioned earlier, this ambitious goal would cost approximately $90 billion at current market prices.
Investor and asset manager Anthony Pompliano recently argued there is a global race for Bitcoin among sovereign governments, and the multi-billion price tag is a small price to pay:
“The national debt increased by $850 billion in the last 90 days. If we were to try to put that same $850 billion into Bitcoin, that is about half of the current market cap. So, we’re talking about 50-100 billion dollars — small rounding errors when it comes to government spending. And I think that it is well worth the risk-reward.”
Galaxy Digital CEO and founder Mike Novogratz recently opined that a Bitcoin strategic reserve under President-elect Donald Trump was unlikely to materialize.
However, if the strategic reserve is established under the incoming Trump administration, Novogratz expects the price of Bitcoin to surge to $500,000 per BTC.
