Trump's Bitcoin Reserve Is a Positive Sign for Crypto Market, Says TD Cowen
Investing.com - Former US President Donald Trump's executive order to establish a strategic Bitcoin reserve and a separate digital asset vault is seen as a positive step for cryptocurrencies, according to analysts at TD Cowen. The move demonstrates the White House's support for digital assets, signaling Bitcoin's potential for future growth.
The order requires the US government to retain Bitcoin seized from civil or criminal asset forfeiture actions, except for those returned to victims or used for law enforcement purposes. This creates a new regulatory regime for digital assets, whereby the government is no longer required to sell seized assets immediately.
While the order requires the Treasury and Commerce departments to explore ways to acquire more Bitcoin without burdening taxpayers, TD Cowen analysts remain skeptical that the government will actually engage in large-scale Bitcoin purchases.
“This is a compromise,” TD Cowen analysts said, noting that the government is not actively buying digital assets, but rather limiting the sale of assets that have already been seized.
The move could impact the management of the US public debt, as the government may need to borrow money instead of liquidating Bitcoin to get cash. This could be politically contentious, especially from Democrats, who could argue that holding Bitcoin exposes taxpayers to the risk of speculating on cryptocurrencies.
However, TD Cowen analysts said that political opposition would not be strong enough to change the government’s plan to stockpile digital assets.
The Treasury Department now has 60 days to assess whether additional legislation is necessary to implement the order.
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