Donald Trump and China Race to Create a Bitcoin Reserve

Donald Trump, the U.S. president-elect, has embraced bitcoin and crypto over the last year, fueling huge bets on the cryptocurrency that some fear are "delusional."

Incoming U.S. President Donald Trump has expressed a desire for the U.S. to establish a bitcoin strategic reserve, following his confirmation that he plans to get the U.S. ahead of China in the bitcoin race.

But hedge fund manager and former Trump communications director Anthony Scaramucci now believes that China has already started to acquire bitcoin.

Speaking on the Bankless Podcast, Scaramucci said that China is aware of Trump's pro-bitcoin stance, and pointed to the bitcoin mining activity that is still present in the country, despite a 2021 ban on bitcoin and cryptocurrency mining that led to an exodus from the country.

In December, Trump confirmed his plans to establish a U.S. bitcoin strategic reserve.

"We're gonna do something great with crypto because we don’t want China, or anybody else … but others are embracing it, and we want to be ahead," Trump told CNBC.

"Yes, I think so," Trump said in response to a question about whether the U.S. will create a bitcoin strategic reserve, similar to its oil reserve.

China and the U.S. both have around 200,000 bitcoin as a result of seizures from criminals, though the U.S. is eventually expected to sell its bitcoin at auction—something Trump said he doesn't want to happen.

Back in July, then-Republican candidate Donald Trump pledged to create a "strategic national bitcoin reserve" and predicted that bitcoin could surpass gold's $16 trillion market cap during an appearance at the Bitcoin 2024 Conference.

Since then, Republican Senator Cynthia Lummis has introduced a bill to Congress, titled the Boosting Innovation, Technology and Competitiveness Through Optimized Investment Nationwide (BITCOIN) Act, which proposes that the U.S. purchase 1 million bitcoin over five years to help reduce the spiraling $35 trillion U.S. national debt.

It's not just the U.S. and China that are looking to create a bitcoin reserve, however.

Last month, Russia lawmakers were revealed to be pushing the country to create a bitcoin strategic reserve after Russian President Vladimir Putin praised bitcoin as an alternative to foreign currency reserves following the seizure of its funds by Western governments in response to its invasion of Ukraine.