On the menu today: An attempt to make the U.S. government’s policy toward cryptocurrency understandable in layman’s terms, and why some investors in crypto want to leverage President Trump’s boundless enthusiasm for it into a sustained policy of the U.S. government purchasing large amounts of Bitcoin . . . and never selling it. It’s easy to see how this helps people who are currently invested in Bitcoin, but a little tougher to see the boundless upside for the rest of us that they promise. Meanwhile, more than 11,000 Americans reach retirement age each day, I recall sounding like the guy in Invasion of the Body Snatchers, and Elon Musk makes a trillion-dollar mistake.
A Strange Economic Gamble
While much of the National Review crew was gathered in National Harbor for the Ideas Summit, President Trump made a pre-taped video address to the Blockworks Digital Asset Summit in New York City, touted as “the first time in history that a sitting president has addressed a crypto conference.” (Cryptocurrency as we think of it today has only been around since 2009.)
“The United States is going to dominate crypto and the next generation of financial technologies,” Trump began.
It’s not going to be easy, but we’re way ahead. Just two weeks ago, we hosted the first ever White House Digital Asset Summit, bringing together many of the world’s top leaders in crypto for a conversation led by our White House AI and crypto czar David Sacks, who’s a fantastic and very brilliant guy. That same week, I signed an order creating the brand-new strategic Bitcoin reserve and the U.S. Digital Asset Stockpile, which will allow the federal government to maximize the value of its holdings instead of foolishly selling them for a fraction of their long-term value which is exactly what Biden did — he got a fraction of their value.
Trump is referring to numbers from Sacks, who contended, “Over the past decade, the federal government sold approximately 195,000 Bitcoin for proceeds of $366 million. If the government had held the Bitcoin, it would be worth over $17 billion today. That’s how much it has cost American taxpayers not to have a long-term strategy.”
According to Sacks, the federal government currently owns about 200,000 Bitcoins already seized in criminal and civil proceedings, a sum worth about $16 billion.
On January 9, a federal judge cleared the way for the U.S. Department of Justice to sell an estimated $6.5 billion worth of Bitcoin seized from the digital wallet of an individual connected to the “Silk Road,” an infamous darknet drug trafficking website that was taken down in 2013. Earlier this month, as the value of the electronic currency experienced a modest drop, the CEO of Bitcoin Magazine accused the federal government of “liquidating America’s bitcoin with haste.”
Wyoming Republican Senator Cynthia Lummis, speaking at the conference, said it’s unclear how much Bitcoin has been sold. “We’re trying to find out how much Bitcoin and whether they are fully surrendered to U.S. custody. We think that could be the basis for the first year’s installment of a strategic Bitcoin reserve. We think the United States has held about 200,000 Bitcoin in asset forfeiture. What we don’t know is how much of that the Biden administration was selling right before the Trump administration took office.”
As Lummis notes, the answer to the question, “How much Bitcoin does the U.S. government have right now?” should not be so difficult to find.
It is worth noting that while Bitcoin has enjoyed a good run lately, it has an intensely tumultuous history as an investment, most recently losing more than half its value from November 2021 to May 2022.
For those wondering, no, Sacks is not advising the White House on policy regarding an asset he still owns. A memo from White House counsel David Warrington stated that upon becoming the White House crypto czar, David Sacks and his investment firm Craft Ventures divested more than $200 million in crypto holdings, with at least $85 million personally held by Sacks. In addition, Sack sold his stock in Coinbase and Robinhood, and his interests in the digital-asset-focused investment funds Multicoin Capital and Blockchain Capital.
As he said at the conference, earlier this month, President Trump created Strategic Bitcoin Reserve that will treat Bitcoin as a reserve asset, and separately established a U.S. Digital Asset Stockpile, consisting of digital assets other than bitcoin owned by the Department of Treasury.
It is worth noting that neither of these involved U.S. taxpayer money purchasing or trading for Bitcoin or other digital assets, at least for now. The Strategic Bitcoin Reserve and the Digital Asset Stockpile consist of bitcoin and digital assets already owned by the U.S. Department of Treasury that were forfeited as part of criminal or civil asset forfeiture proceedings, and any other Bitcoin that any other federal agency has floating around.
Some cryptocurrency enthusiasts found Trump’s executive order a disappointment; they wanted to see the U.S. government actually start buying Bitcoin — paying in U.S. dollars — to build up the new strategic reserve.
“This is the most underwhelming and disappointing outcome we could have expected for this week,” wrote Charles Edwards, the founder of Capriole Investments. “But also not surprising. Looks like no tangible [Bitcoin Strategic Reserve] in 2025. No active buying means this is just a fancy title for Bitcoin holdings that already existed with the government. This is a pig in lipstick.”
The day after that executive order, the White House hosted its first “crypto summit.” One of the more controversial proposals at that summit came from Michael Saylor, the former longtime CEO of MicroStrategy, and a major investor in Bitcoin. Reportedly, “As of this month, MicroStrategy has accumulated nearly 500,000 [Bitcoin], making it the public company with the largest Bitcoin holdings in the world.”
Saylor laid out a national “digital assets strategy” that advised the U.S. government to purchase massive amounts of Bitcoin and then to “never” sell it. The key steps in Saylor’s proposed plan:
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Acquire 5-25% of the Bitcoin network in trust for the nation through consistent, programmatic daily purchases between 2025 and 2035, when 99% of all BTC will have been issued.
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The Strategic Bitcoin Reserve (SBR) has the potential to generate $16-81 trillion in wealth for the U.S. Treasury by 2045, offering a viable pathway to offset the national debt.
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Never Sell Your Bitcoin! By 2045, the reserve should be generating $10+ trillion annually, continuously growing, and serving as a perpetual source of prosperity for the American people for generations to come.
Saylor, whose former company already owns the biggest Bitcoin stash in the world and who owns gobs of the stuff himself, wants the U.S. government to buy even bigger gobs of Bitcoin, every day for the next decade — maintaining consistent demand, which would discourage price drops, and likely encourage price increases — and then never sell it.
(Note that Bitcoin, unlike a stock, does not pay out dividends, although shares of stock in companies involved in cryptocurrency trading may pay dividends.)
Even if you’re a financial novice, you can notice the likely consequence; as one observer put it, the Saylor plan “would make him the richest man on the planet.”
Saylor is on good terms with the president and the Trump family. Just this past weekend he sat down with Lara Trump on Fox News, and explained how the “digital gold” of Bitcoin saved his company from an “existential crisis”:
Lara Trump: A lot of people say, ‘all right, if I want to invest a little money in Bitcoin, I don’t know where that goes.’ But it does go somewhere. You’re saying it is actually more secure and safer than actually putting it into a bank, because it’s yours and no one could ever take that from you, is that right?
Saylor: The real appeal of Bitcoin is people don’t want to invest or risk their money, they want to save their money. So Bitcoiners would say, ‘We’re not investing. we’re saving. It’s a savings technology.’ What if you just wanted to take your life savings and put it into a bank in cyberspace that promises to never freeze your funds, that isn’t run by humans, it’s run by incorruptible software. And you’re going to go to sleep for a decade, right? If you’re Rip Van Winkle, what can I buy that 30 years from now will be more valuable, that will hold its value? But the real breakthrough, the ‘ah-ha!’ is if I can send a million dollars from me to you without an intermediary. We want to know that we control it — not our bank, not our government, not the mayor, not the CEO of the company.
Now, this is not a financial news and advice newsletter. (Although I would note the 1989 Gregg Jefferies Topps rookie card is apparently worth a whole five dollars by now!) I don’t know if price of Bitcoin will stay high — as of this writing, it’s $84,070.21, but it will probably change by the time you read this — or whether the whole thing is a bubble waiting to pop. The price of Bitcoin is like the price of a lot of other things: It all depends on what someone else is willing to pay for what you’ve got.
But the Sam Bankman-Fried debacle has me wary of a lot of “crypto bros” and the propensity to tell people exactly what they want to hear in order to get their money. If you want to argue that the value of the U.S. dollar is also unpredictable, and you never know when the U.S. government will go on a spending spree and devalue the dollar, hey, I hear you. We all just lived through the Biden years.
But the only thing that’s making one Bitcoin cost roughly the equivalent of tuition, room and board at an Ivy League school for a year is the widespread belief that it’s worth that and will be worth at least that much in the future. If that faith gets shaken, suddenly nobody’s going to be willing to pay 80 grand or so.
The idea of throwing all the seized Bitcoin into a pot at the Department of the Treasury and hoping it rises in value seems like a relatively low-risk approach, at least right now. But there are voices who want the U.S. government to actively spend money to accumulate more Bitcoins.
(No, the deficit and debt did not disappear when you weren’t looking. Our current fiscal year deficit is at $1.1 trillion with eight months to go. Our national debt is at $36.2 trillion.)
Earlier this year, Senator Lummis introduced “the Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide Act of 2025’’ or the (sigh) “BITCOIN Act.” That legislation directs the federal government to purchase up to 1 million bitcoins over five years that would be transferred to a “decentralized network” of storage facilities.
Under the BITCOIN Act, from fiscal year 2025 through 2029, if the Federal reserve banks remit net earnings to the general fund of the Treasury, the first $6 billion of these remittances will be used in the Bitcoin Purchase Program. (Federal Reserve Banks serve as a bank for other banks and government agencies; Federal Reserve funding comes mainly through interest on government securities that it bought on the open market.)
(One math challenge to start: If the cost of Bitcoin stays at $84,000 each, then the government will be purchasing considerably less than 1 million Bitcoins over the five-year period under this legislation. At the current price, $6 billion in funding would allow the government to purchase 71,428.57 Bitcoins each year, ending with 357,142.8 Bitcoins.)
Under the bill, all new Bitcoin added to federal government’s reserve would have to be held for at least 20 years before it could be sold. And the Treasury Department would be prohibited from selling off more than 10 percent of the reserve during any two-year period.
Republican Senators Jim Justice of West Virginia, Tommy Tuberville of Alabama, Roger Marshall of Kansas, Marsha Blackburn of Tennessee, and Bernie Moreno of Ohio are cosponsors of Lummis’s bill; Representative Nick Begich of Alaska has introduced companion legislation in the U.S. House of Representatives.
If they get their way, the U.S. government will start buying billions of dollars’ worth of Bitcoin each year, and holding it for at least 20 years . . . hoping it retains its value until the mid-to-late 2040s.
ADDENDUM: In February 2024, four months into the fiscal year, the U.S. government had a deficit of $828 billion. As noted above, at the end of the last month, the U.S. government had a deficit of $1.14 trillion — a good $186 billion higher. In fact, the last U.S. Department of the Treasury monthly statement shows the U.S. government spent $603 billion in February — $36 billion more than it spent than February 2024.
These higher deficits are occurring while receipts (money coming in) totaled $1.9 trillion during the first five months of fiscal year 2025, according to Congressional Budget Office estimates — $37 billion (or 2 percent) more than during the same period a year ago.
As you probably noticed, you’re not getting substantially more government than you did a year ago.
So you’re probably asking, how can the deficit be increasing, with more money coming in to the federal government AND Elon Musk hoisting a chainsaw, DOGE making cuts, and federal workers getting furloughed?
Well, for starters, the last of the Baby Boomers are retiring, which means more elderly Americans, which means more Social Security payments and more health-care spending on the elderly. From the CBO:
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Spending for Social Security benefits rose by $38 billion (or 6 percent) because of increases in the average benefit payment (stemming mostly from cost-of-living adjustments) and in the number of beneficiaries.
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Medicare outlays increased, on net, by $20 billion (or 5 percent) because of increased enrollment and higher payment rates for services.
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Medicaid outlays increased by $15 billion (or 6 percent), largely because of rising costs per enrollee.
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Outlays for certain refundable tax credits increased by $26 billion (or 29 percent), primarily because of increased enrollment in health insurance purchased through the marketplaces established under the Affordable Care Act.
About 11,200 people reach retirement age each day — that’s about 341,000 per month. The average Social Security benefit is about $1,862 per month. Each month, you’re adding about $640 million in new payments. (The “good” news is that you can subtract the recipients who die.)
I warned you that the entitlements spending crisis was already here way back in 2012, and everyone reacted like I was the nutty-sounding, paranoid guy in the Invasion of the Body Snatchers movies. (It’s the same guy in both the 1956 and 1978 versions!)
When the debt gets bigger, we must pay more in interest. “Outlays for net interest on the public debt increased by $44 billion (or 12 percent) primarily because the debt was larger than it was in the first five months of fiscal year 2024.”
Finally, note that “outlays of the Department of Homeland Security increased by $16 billion (or 45 percent), driven mostly by spending in response to Hurricanes Helene and Milton.
It’s just fine for DOGE to cancel $2.5 million in office leases for the Mine Safety and Health Administration in Kentucky, to save $548,896 by cutting the Defense Contract Management Agency’s office space in Buffalo, N.Y., or canceling a $179,417 lease for a National Oceanic Atmospheric Administration office in Wall Township, N.J.
But despite the popular quote, “A billion here, a billion there, and pretty soon you’re talking real money,” dink-and-dunk spending cuts are not going to make the deficit go away.
Oh, and Commerce Secretary Howard Lutnick said on the All In podcast Thursday that when Elon Musk pledged that DOGE would save the U.S. government $2 trillion during the Trump rally in Madison Square Garden, he was supposed to say $1 trillion.