President-elect Donald Trump has proposed creating a "Strategic National Bitcoin Stockpile," but its purpose is still unclear. This idea has caused the price of bitcoin to surge to a record high of $108,000. However, the price dropped after the Federal Reserve's meeting.
Trump first mentioned this idea at a bitcoin conference in Nashville, suggesting that seized cryptocurrency from criminal prosecutions would form the core of this stockpile. The U.S. currently owns 198,000 bitcoins worth $21 billion.
The concept is similar to the Strategic Petroleum Reserve, which stores oil for emergencies. The idea has gained support from some crypto investors and politicians, like Senator Cynthia Lummis, who proposed the government buy 1 million bitcoins over five years as a hedge against economic uncertainty.
Supporters argue that a bitcoin reserve could strengthen the U.S. dollar and prevent bitcoin from being used by bad actors. Critics, however, question its necessity and potential economic risks, noting that bitcoin is not essential for running the economy and could expose taxpayers to financial risks.
