Are Trump's Bitcoin Plans Doomed? Insights from Compass Point

Limited Prospects for Trump's Bitcoin Strategic Reserve

Investing.com reports that Compass Point Research believes the prospects for a proposed Bitcoin strategic reserve under Donald Trump’s administration are limited due to potential regulatory and fiscal hurdles.

Compass also noted that the recently introduced BITCOIN Act, which calls for the Treasury to accumulate the cryptocurrency, is unlikely to become law.

While Trump could potentially sign an executive order for the Treasury to establish such a reserve, it could easily be rescinded by a future administration. This situation would differentiate the Bitcoin reserve from other government reserves, like the strategic petroleum reserve, which were created through congressional legislation.

Additionally, the Treasury lacks Congressional authorization to use government funds to acquire Bitcoin, and with a Republican-controlled Congress focused on reducing fiscal spending, the approval for such funds seems improbable.

The Bitcoin Act, proposed by Senator Cynthia Lummis, aimed to finance the purchase of 1 million Bitcoin over five years but is considered a “nonstarter” by Compass, which estimates a less than 10% chance of it passing before 2026.

Despite Bitcoin reaching record highs recently, traders are now experiencing a cooling off as they await more concrete policy cues from Trump. The cryptocurrency almost hit $100,000 but has since stabilized amid uncertainty.