Could Bitcoin Play a Role in Trump’s New Wealth Fund Strategy?

President Donald Trump enacted an executive order on February 3, calling for the establishment of a sovereign wealth fund.

This follows his earlier directive that set up a national digital asset reserve, underscoring a heightened emphasis on strategic financial holdings.

Bitcoin Enthusiasts Monitor Trump’s Sovereign Wealth Fund

The executive order instructs the Secretary of the Treasury as well as the Secretary of Commerce to formulate an extensive plan within 90 days for the establishment of the fund.

“The United States can utilize such returns to enhance fiscal sustainability, diminish the tax burden on American families and small businesses, establish enduring economic security, and bolster US economic and strategic leadership on the global stage,” the order stated.

For reference, sovereign wealth funds are state-held investment funds that manage surplus reserves. These are usually obtained from trade surpluses, commodity earnings, or fiscal excesses.

Such funds are invested across a variety of assets, including equities, bonds, real estate, and infrastructure, both domestically and globally. The aim is to secure long-term financial stability and economic progress.

Even though the executive order did not specifically cite Bitcoin (BTC) or other cryptocurrencies, the announcement ignited excitement among BTC supporters due to Senator Cynthia Lummis’ reaction. Lummis, a prominent proponent of the Strategic Bitcoin Reserve and chair of the Senate Banking Sub-committee on Digital Assets Committee, responded to the announcement on X (formerly Twitter).

“This is a ₿ig deal,” she posted.

Her usage of the “₿” symbol kindled optimism for Bitcoin’s incorporation into the fund.

“Following Donald signing the order, the US will acquire Bitcoin for the sovereign wealth fund and will refer to it as strategic Bitcoin reserves,” one user commented on X.

Significantly, the market probabilities of Trump creating a Bitcoin reserve within the first 100 days on the prediction platform Polymarket rose to 18% after the order was issued. The odds had dropped from 48% on Inauguration Day to 13% by February 1.

Trump’s previous executive order regarding the digital asset reserve also broadly characterized “digital assets” without detailing Bitcoin specifically.

“The term “digital asset” refers to any digital representation of value recorded on a distributed ledger, which includes cryptocurrencies, digital tokens, and stablecoins,” the order affirmed.

Crypto Momentum Expands at the State Level

In the meantime, amid rising speculation, numerous US states are propelling their own cryptocurrency initiatives. Oregon, New Jersey, Mississippi, and Indiana have recently proposed legislation to support crypto adoption and regulatory transparency.

Oregon’s HB2071 grants specific rights to blockchain users. It prohibits state and local authorities from hindering digital asset activities. Furthermore, it exempts particular blockchain transactions from the Oregon Money Transmitters Act.

New Jersey Assembly Bill 2249 (Digital Asset and Blockchain Technology Act) sets up a regulatory framework for digital asset enterprises and establishes a Digital Asset Enforcement Fund for oversight.

Mississippi’s HB 1590 (Blockchain Basics Act) prevents state and local governments from implementing central bank digital currencies (CBDC) and secures self-custody rights. It also exempts crypto transactions below $200 from capital gains tax and eliminates licensing requirements for mining and staking activities.

Indiana House Bill 1156 safeguards the right to use, retain, and accept digital assets. It restricts local limitations on crypto transactions and ensures that digital asset mining is classified as a permitted industrial activity.

Indiana has also previously proposed House Bill 1322, which encourages blockchain adoption and Bitcoin investment strategies.