Trump's BTC Stockpile Plan in Jeopardy as Feds Move Seized Tokens

While last month's re-election of Trump to a second term as U.S. president added significant fiat value to the BTC token, many crypto bros won't be satisfied until Trump makes good on his vow in July to establish a “strategic national [BTC] stockpile.”

Crypto bros are hoping that Donald Trump’s second term will continue to boost the BTC token’s fiat value, while others fear that Trump’s desire for a strong U.S. dollar could undermine the dollar’s status as the world’s reserve currency.

While last month’s re-election of Trump to a second term as U.S. president added significant fiat value to the BTC token, many crypto bros won’t be satisfied until Trump makes good on his vow in July to establish a “strategic national [BTC] stockpile.” Trump said the ‘core’ of this stockpile would be the 210,000 BTC tokens seized by the federal government over the years, supplemented by additional BTC the government “acquires into the future” (by unspecified methods).

The ’core’ of that plan could be in jeopardy following reports of movement by a digital wallet containing nearly 20,000 BTC tokens seized by the feds a few years ago from an individual linked to the Silk Road darknet marketplace. The nearly $2 billion worth of BTC was transferred to the Coinbase (NASDAQ:COIN) exchange, suggesting that the feds are either planning to sell or have already sold these tokens to take advantage of BTC’s recent price pump.

While the report appears to have contributed to a modest 1% decline in BTC’s price, crypto bros fear a much greater decline should outgoing President Joe Biden order a fire sale of the government’s other 190,000 BTC. Conspiracy theorists also suspect that this is Biden giving a giant middle finger to Trump’s ‘stockpile’ plan.

Amid fears that Trump’s ‘stockpile’ plan could be undone should the BTC cupboard be bare by the time he’s sworn into office on January 20, federal politicians like Sen. Cynthia Lummis (R-WY) want the government to simply buy 5% of the total 21 million BTC supply. This would be funded by the government selling off its gold reserves, but it’s unclear how the gold-loving Trump feels about this idea.

(Side note: Federal Reserve chair Jerome Powell said Wednesday that BTC was “a speculative asset” but “not a competitor for the dollar; it’s really a competitor for gold.” BTC crossed the magical $100,000 barrier shortly thereafter. Read into that what you will.)

We’ll leave the question of whether relying on a token with a history of rollercoaster value rides is a really, really bad idea for another day. A much bigger question is what impact Trump’s financial policies—including his promises/threats to impose massive tariffs on America’s trading partners—will have on the U.S. dollar, including a potential move away from viewing the dollar as the world’s reserve currency.

Throwing BRICS through windows

During his first term, Trump imposed steep tariffs against countries he perceived to be abusing fair trade rules. Tariffs were also imposed as leverage to convince foreign governments to acquiesce on other areas of policy Trump was trying to implement.

During the 2024 election campaign, Trump called tariff “the most beautiful word” in the dictionary, based on his belief that tariffs repatriate jobs/businesses that left the U.S. long ago in search of cheaper labor, looser regulations, etc. Economists are dubious about Trump’s view of tariffs as an economic cure-all, noting that the costs are largely borne by average consumers who can no longer access inexpensive products and that retaliatory tariffs will act as a drag on the global economy as a whole.

Trump has already vowed to impose new 25% tariffs on Canada and Mexico, plus 10% tariffs on products from China if these nations don’t kowtow to his policy wishes. But he recently went nuclear on the so-called BRICS nations, threatening them with 100% tariffs if they proceed with plans to issue a common currency to replace the dollar as the common denominator of international trade.

BRICS (Brazil, Russia, India, China, and South Africa) has been on an expansionist tear of late, inviting six additional countries to join the club in 2023, and invitations went out to a further 13 countries this October. This expanded body would represent around 45% of the global population and 35% of global GDP.

Brazil, Russia, and Iran, in particular, have been pressing for the launch of a BRICS common currency, in part to neuter America’s ability to impose economic sanctions on countries/individuals/entities Uncle Sam doesn’t like. So far, these efforts have failed to garner universal support among BRICS members (but that hasn’t stopped some Chinese ‘crypto’ cowboys from trying to pass off a bogus ‘BRICS Pay’ system as an alternative to the global SWIFT network).

Trump’s BRICS threat was anything but subtle, saying America wanted “a commitment from