Investment bank KBW referred to President Trump’s executive order, which establishes a strategic bitcoin (BTC) reserve and a crypto stockpile, as a “landmark moment” for the cryptocurrency sector in a research report released on Friday.
The President instructed his administration to create a Bitcoin Strategic Reserve that will hold assets seized by the government, along with a plan to accumulate various other digital assets.
According to KBW, the “world’s largest superpower has adopted several prominent blockchain protocols.”
Bitcoin is the main beneficiary in this initiative, as it is designated solely as a reserve asset. The report indicates that no bitcoin will be liquidated, and the government is also exploring options for further acquisitions of the cryptocurrency.
KBW estimates that the government currently holds approximately 198,000 bitcoins. They noted that around 55% of this amount will be returned to Bitfinex, leaving around 86,000 bitcoins in the reserve.
While no specific strategies were disclosed for accumulating additional bitcoin, KBW suggested that the government might consider selling some of its over $800 billion gold reserve to finance further crypto purchases.
Another option mentioned by the bank is the issuance of U.S. Treasury Bitbonds, which are treasury bonds featuring a bitcoin “kicker,” potentially lowering the government’s borrowing costs.
The report also mentioned the possibility of the government collaborating with U.S. miners to obtain bitcoin royalties in exchange for tax incentives or breaks.
Read more: Market Experts Weigh In on Trump’s Strategic Bitcoin Reserve That Takes Out $17B in Potential Selling From BTC
