Crypto
What is the strategic bitcoin reserve that Trump is promising and how would it work?
The US election results are monopolizing the debate in the crypto world. Donald Trump’s victory has taken Bitcoin to levels never seen before. In fact, for days now, a single Bitcoin is nearing $100,000, which has investors holding their breath. Other altcoins are joining in this euphoria, breaking new records. This includes Solana, as well as XRP — Ripple’s currency — which has seen triple-digit growth.
The cryptocurrency sector — already euphoric about the election of a pro-crypto president who wants to gut financial regulations — is now awaiting the materialization of the numerous promises that the Republican candidate made during the 2024 campaign.
Experts warn that it remains to be seen whether the tycoon will actually be able to honor his announcements. But, for the moment, the industry’s wishes seem to be fulfilled. SEC Chairman Gary Gensler — who has been skeptical and sometimes hostile to cryptocurrencies over the years — has already announced that he will step down as head of the securities market supervisor on January 20 at noon, just as Trump takes office. Meanwhile, the Republican recently named Scott Bessent as his nominee for the Department of the Treasury.
Bessent — in an interview with Fox Business earlier this year — said that cryptocurrencies “are about freedom and the crypto economy is here to stay. These assets are attracting young people, who haven’t participated in the [stock market].” But one of the promises that most excites the industry and investors is the possibility of creating a strategic reserve of bitcoins in the U.S. Trump mentioned this project back in June, during the Bitcoin 2024 conference held in Nashville, Tennessee. The proposal has deeply resonated with the sector.
What is a strategic bitcoin reserve?
A strategic reserve is a set of external assets that are immediately available and under the control of the monetary authorities. They’re meant to meet the financing needs of the balance of payments, or to intervene in the foreign exchange markets in order to influence the exchange rate, to name just some examples. In this way, a bitcoin reserve would be similar to the gold and foreign currency reserves held by central banks. There are also strategic reserves of basic raw materials, such as oil.
The pioneering cryptocurrencies would be incorporated into the mix of assets that the North American country has on its balance sheet, with the aim of diversifying reserves. However, the project isn’t clearly laid out and there’s still much speculation on the matter, starting with the basic question of which authority would be responsible for managing it. Would it be the Federal Reserve? Or another institution? And the no less important question concerns how to pay for it. Bitcoins could be purchased after selling off other assets — such as gold or bonds — increasing debt, or expanding the Federal Reserve’s balance sheet, an operation that is colloquially known as “printing money.”
This reserve would also include the bitcoins that the U.S. administration has seized to-date: some 208,109, worth almost $20 billion at the current market price. These include the cryptocurrencies confiscated in 2013 from Ross Ulbricht, the founder of Silk Road, a dark web that operated exclusively in bitcoin. Users would traffic drugs and hire hitmen, among other things. During the election campaign, Donald Trump promised to commute Ulbricht’s life sentence upon reaching the White House.
What does the proposal look like?
The most concrete proposal so far is that of pro-crypto Republican Senator Cynthia Lummis, who introduced her Bitcoin Act of 2024 (Boosting Innovation, Technology and Competitiveness through Optimized Investment Nationwide Act) in the Senate. This project provides for the Treasury and the Federal Reserve to buy 200,000 bitcoins each year for a period of five years, until reaching one million units. This would represent about 5% of the total global supply of bitcoins, which is around 21 million. The reserve would subsequently be maintained for a minimum of 20 years. The idea is that this reserve would serve as a hedge against the devaluation of the U.S. dollar, to strengthen national balance sheets and support future debt issues.
In the legislation, the proposed mechanism to purchase the cryptocurrency has two elements: on the one hand, the surplus that the Federal Reserve returns to the Treasury (i.e. the profits of the U.S. central banking system) would be used to buy bitcoin. On the other hand, it proposes that the central banks of each state reassess the gold certificates they hold, to better reflect the value of the metal in the current market. They must then deliver the difference to the Treasury, which will use the funds to buy bitcoin.
Noelle Achenson — author of the Crypto is Macro Now newsletter — explains that the Fed has certificates on its balance sheet that represent the gold held by the Treasury. The total valuation is approximately $10.5 billion. However, this value is based on a legal price that, since 1973, has remained constant at $42 per ounce. If valued at current prices, the stored gold would be worth about $643 billion.
Beyond the federal administration, states are also moving to have their own bitcoin reserves. Mike Cabell — a member of the Pennsylvania House of Representatives — recently introduced a bill for the creation of a strategic bitcoin reserve to allow the state treasury to invest up to 10% of its funds in bitcoin. The aim of this legislation is for the cryptocurrency to serve as a hedge against inflation. However, the details of the proposed regulations are still unknown.
What have other countries done?
El Salvador has been a pioneer in creating a strategic crypto reserve. In fact, the Central American country was the first to adopt bitcoin as legal tender in September of 2021. The government has since acquired up to 5,944 bitcoin, valued at more than $560 million at the current market price, according to the country’s Bitcoin Office. Added to this is the kingdom of Bhutan, which owns 12,218 bitcoins, valued at $1.2 billion, according to data from the firm Arkham Intelligence. The firm details that the fortune of this crypto state comes from bitcoin mining operations (taking advantage of the national orography for the generation of electrical energy) carried out by the country’s investment arm, the state-owned conglomerate Druk Holdings.
Other nations that own the pioneering cryptocurrency have mainly accumulated it through confiscations, as is the case of the United States. But beyond the North American country, other states have been collecting bitcoin in recent years. The United Kingdom, in fact, has an account with 61,245 tokens, worth more than $6 billion.
Experts also point to China as one of the largest holders of this cryptocurrency. In November of 2020, authorities confiscated 194,775 bitcoin from members of the PlusToken Ponzi scheme, a scam operating in the Asian country that promised its victims “constant” double-digit returns. The perpetrators of this scam collected cryptocurrencies worth billions of dollars, which they then used to buy properties and luxury cars for themselves or their relatives. However — according to Arkham Investments — it’s unclear whether the Chinese government still owns these seized bitcoins, or has since sold them.
What do the analysts say?
The experts consulted by EL PAÍS disagree on the possibility of this project being carried out. Luis Garvía — director of the Financial Risk graduate program at the Madrid-based Catholic Institute of Business Administration (ICADE) — is blunt: “It seems absolutely reasonable to me that any government should have a part of its reserves in bitcoin. Diversification is very important,” he emphasizes.
Carlos Salinas — a professor in the master’s degree program in Blockchain and Digital Asset Investment at the IEB — believes that the promise of creating a bitcoin reserve is one of the main drivers of the asset’s surging price. However, he doubts that the U.S. can accumulate such a large quantity of bitcoin, although he doesn’t rule it out entirely. And, if the proposed legislation indeed sees the light of day, other nations — such as Russia, China, Brazil, or India — wouldn’t want to be left out: “At the last highs of bitcoin in 2021, we saw the FOMO, but in this current bullish phase, we’re [dealing] with institutional FOMO. We don’t know how big this can become,” he warns
For his part, Javier Molina — a senior market analyst at eToro — doubts that bitcoin can ever be considered a store of value like gold, nor that there will ever be a large-scale adoption of the currency by governments, at least in the short and medium-term. “While the idea that bitcoin could one day play a role similar to that of gold as a store of value — like ‘digital gold’ — may be interesting, I think we’re still far from seeing a race for digital reserves at the government level,” he opines.
David Tercero-Lucas is a professor of Economics at ICADE. He specializes in cryptoassets and digital currencies. He highlights that, while bitcoin shares certain characteristics with traditional assets — such as gold, for example, given its scarcity and its independence from centralized entities — it lacks other essential characteristics typical of reliable reserve assets. “Gold has a millennia-old history as a store of value; it’s widely-accepted and has industrial uses that reinforce its usefulness. Currencies, such as the dollar, are backed by robust states and financial systems. Bitcoin, on the other hand, is extremely volatile and its value depends more on speculative expectations than on tangible fundamentals,” he details.
Therefore, according to this expert, selling gold to buy this cryptocurrency is risky, especially since its capacity to serve as a strategic reserve in crisis contexts has never been validated in the long-term. He also points out that the idea that this asset cannot be sold for 20 years — one of the requirements included in the Bitcoin Act — doesn’t offer financial resilience in the short-term. In fact, it contradicts the purpose of a strategic reserve, which should be available to stabilize the economy in emergency situations.
Santiago Carbó — a professor of Economics at the University of Valencia — agrees with this analysis. He warns that the proposed U.S. legislation sets a dangerous precedent: “Bitcoin has been anything but a stable value until now.” He trusts in the orthodoxy of the Federal Reserve to prevent this project from being approved, while still recognizing the growing acceptance of this cryptocurrency among investors. He also points to the lack of transparency in the crypto market, its lack of maturity and high levels of risk that make it unreliable as a reserve asset.
The expert consulted by EL PAÍS who’s most wary about the launch of a strategic reserve is Manuel Villegas, a digital asset analyst at Julius Baer. For him, there’s still a lot of noise around the idea. “The market has anticipated a lot and I think it hasn’t yet fully understood that this is [a serious] proposal. There’s a lot of speculation about what may happen. But the Federal Reserve is an independent authority and, in recent months, Jerome Powell hasn’t been very favorable to this issue,” he warns. Moreover, unlike SEC Chair Gary Gensler, the Fed chairman already made it clear at the last Fed meeting that he doesn’t intend to resign and that Trump cannot fire him.
Add to this another factor: market concentration. According to Villegas, buying 200,000 bitcoins a year in a market as illiquid as the current one could drive prices up excessively. And, on the other hand, it could concentrate a large part of the supply of this cryptocurrency in the hands of the U.S.: “It would become one of the largest holders of the asset, with 5% in reserves. [We also must add] the 3% held by MicroStrategy [which already has about $17 billion worth of bitcoin on its balance sheet] plus the holdings of Marathon and BlackRock,” he concludes.
While Bitcoin investors and the industry are rubbing their hands gleefully at the prospect of the pioneering cryptocurrency’s value skyrocketing even further, prediction markets indicate that this project won’t happen: the odds of the U.S. having its own Bitcoin strategic reserve stand at just 30% on Polymarket.
Translated by Avik Jain Chatlani.
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Donald Trump uses his presidency to enlarge his private fortune in ways that none of his predecessors ever ventured to attempt.
In his first year back in office, Trump reported $2.2 billion in income, of which about $1.4 billion represented new revenues from cryptocurrency businesses, according to his annual Personal Financial Disclosure for 2025, released June 30.
Trump, as president last year, thus hauled in more money than he did in any previous year. One big chunk of the $1.4 billion was $635 million from a license agreement for his so-called $TRUMP digital “meme” coins, also called “crypto” coins or “tokens.”
$TRUMP coins surfaced three days before his inauguration on Jan. 20, 2025. The following month, Trump’s Securities Exchange Commission — newly weakened at the president’s demand — announced that such tokens would no longer come under SEC oversight.
A few weeks after that, in May, Trump hosted a dinner for the top 220 $TRUMP holders at his private golf club in Northern Virginia, just outside of Washington.
While the president raked it in, one million buyers of the meme coin lost a total $3.81 billion, a private analytics firm revealed.
Trump has yet to specifically address having snared so much money from these losing investors.
LIKENED TO ‘WILD WEST’
Under the Biden administration, SEC Chairman Gary Gensler pursued the crypto sector with enforcement actions. Gensler said the business was like the “wild west” and warned that without strong federal oversight assuring integrity, crypto could prove disastrous for the financial system. Trump promised during his campaign to fire Gensler, who instead quit on Inauguration Day.
It’s now also revealed that Trump raked in $525 million from crypto token sales by World Liberty Financial, founded by the president and his sons Donald Jr. and Eric. Beyond token sales, other investment and sales income related to WLF reportedly totaled more than $350 million.
Coziness between the administration and the industry is apparent. WLF has an important business relationship with Binance, a global cryptocurrency exchange and blockchain ecosystem. A blockchain is a secure, shared digital ledger that stores information across a network of computers in a way that tech experts say cannot be tampered with. Transactions can be made opaque to regulators. In the lingo of the trade, Binance acts as WLF’s primary liquidity provider, code developer, and central market for WLF’s stablecoin called USD-1, because its value is pegged to the U.S. dollar.
Changpeng Zhao, Binance’s founder and former head, pleaded guilty in 2023 to violating money laundering laws. But Trump pardoned him in October 2025. Very suspiciously, the president told news media he didn’t know who Zhao was.
Last week, during an Oval Office appearance, Trump broadly denounced past enforcement actions against crypto shenanigans and bragged: “Every time I see a crypto guy where they dropped an investigation I said, ‘You’re lucky I’m president.’ ”
So it will take no deep probe to discover that Trump’s championing of crypto, and his family’s interest in it, undermine the impartiality of his government’s regulatory and enforcement role.
DISTURBING SUSPICIONS
The rise of World Liberty Financial also raises disturbing suspicions of foreign nationals buying favor with the White House. One Abu Dhabi-backed firm invested $2 billion in its stablecoin. Trump’s commerce secretary, Howard Lutnick, and his son Brandon, have been involved in developing WLF along with Mideast emissary Steve Witkoff and his sons.
Corruption is defined in the dictionary as “the dishonest, fraudulent, or illegal misuse of entrusted power for personal gain.” The question is how explicitly and specifically Trump’s actions meet the definition.
Even without counting Trump’s garish promotion of an industry from which he benefits bigly, no other president has cashed in even close to his other, non-crypto ventures, worth $800 million for 2025. That includes his golf courses, hotels, traditional real estate, lawsuits, branded merchandise, stock gains and licensing agreements.
But because of its unique, cutting-edge role, crypto puts up the biggest numbers for Trump’s rapid acquisition of wealth. And that’s where the massive controversial issues lie for the future.
Consumer advocates and traditional financial experts predict trouble and complex difficulties not for Trump but for the public, investors, and consumers under the new regime, with its radical preemption of enforcement against shady practices.
Of the many consumer groups that condemned the Trump crypto windfall, one organization, Public Citizen, stands out for its comment: “Donald Trump’s grift is degrading the presidency, ripping off consumers and investors, and driving dangerous policy that risks future financial crises.”
“The least that Congress can do in light of this disclosure is insist on language in cryptocurrency legislation prohibiting the president and other federal officeholders from trading or holding crypto assets while in office.”
The open question is how that will happen unless Congress and executive agencies stop passively obeying Trump’s demands. This scandal is about an unheard-of level of self-dealing by the government’s most powerful individual. There is litigation involving WLF, but a resolution cannot be expected quickly.
Perhaps only more crypto losers, like those who bought a Trump meme coin, will inspire future reforms.
MEMBERS OF THE EDITORIAL BOARD are experienced journalists who offer reasoned opinions, based on facts, to encourage informed debate about the issues facing our community.
Crypto
Morgan Stanley Targets Ethereum and Solana ETF Market Share Amid Intensifying Fee Competition
Key Takeaways
- Morgan Stanley’s ethereum and solana filings extend the bank’s proprietary crypto ETF strategy beyond its existing Bitcoin fund.
- The proposed pricing suggests crypto ETFs are shifting from product novelty toward competition for investor assets.
- Both trusts would include staking and institutional custody but remain preliminary offerings without confirmed launch dates.
Why the Crypto ETF Market May Be Entering a Commodity Phase
Morgan Stanley’s proposed ethereum and solana exchange-traded funds (ETFs) would enter a market where issuers increasingly offer similar exposure to the same assets. The firm recently amended both filings with the U.S. Securities and Exchange Commission (SEC) to include a 0.14% management fee, below Grayscale’s 0.15% and Franklin Templeton’s 0.19%. The narrow spread signals intensifying price competition.
Brian Rudick, chief strategy officer at Solana treasury company Upexi and formerly head of research at crypto trading firm and liquidity provider GSR, argued that the fee matters less than what it suggests about the market’s development. On July 9, he shared on X:
“Issuers don’t compete on price until the product is close to a commodity and the fight is for share, the same compression the spot BTC ETFs went through.”
“ SOL ETF AUM already crossed $1B, led by Bitwise’s BSOL, so there is real share to fight over,” he added.
The argument places the 0.14% fee within a shift from product creation to asset gathering. Once several issuers offer similar exposure, management costs become one of the clearest points of distinction. His comparison with spot bitcoin ETFs suggests ethereum and solana products may be entering the same phase of fee compression.
Bitwise launched its solana ETF, BSOL, on NYSE Arca in October 2025, marking the first U.S.-listed vehicle to provide direct exposure to spot SOL. The fund goes beyond simple price tracking by actively staking its holdings, allowing staking rewards to contribute to fund returns after applicable expenses.
How Morgan Stanley Designed the Ethereum and Solana Trusts
The Morgan Stanley Ethereum Trust would trade on NYSE Arca under the ticker MSSE and track the Coindesk Ether Benchmark 4PM NY Settlement Rate. Alongside its proposed 0.14% fee, Morgan Stanley Investment Management intends to stake 50% to 80% of the trust’s ether under normal conditions.
BNY and Coinbase Custody would hold the ethereum trust’s assets. Staking providers and custodians would receive an aggregate 5% of staking rewards, leaving the remainder with the trust. Net rewards would be distributed monthly, but at least quarterly, though the filing does not guarantee the amount.
The Morgan Stanley Solana Trust would trade on NYSE Arca under the ticker MSOL and track the Coindesk Solana Benchmark 4PM NY Settlement Rate. It would also carry a proposed 0.14% fee. The trust may stake up to 100% of its SOL while keeping some holdings unstaked for redemptions, expenses and distributions.
BNY and Coinbase Custody would also serve as custodians for MSOL. Staking providers and custodians would receive 5% of staking rewards, leaving 95% with the trust. Net rewards would be distributed monthly, but at least quarterly, while validator block rewards and transaction fees would not accrue to shareholders.
What Morgan Stanley’s Bitcoin ETF Shows About the Strategy
Morgan Stanley has already used the same fee level in its spot bitcoin product. The Morgan Stanley Bitcoin Trust began trading under the ticker MSBT on April 8, 2026, with a 0.14% annual management fee. That undercut Blackrock’s IBIT at 0.25% and Bitwise’s spot bitcoin ETF at 0.20%.
MSBT became the first proprietary spot cryptocurrency ETF launched under the name of a major U.S. commercial bank. As of July 10, 2026, it traded at $18.47 per share and held about $364.23 million in total net assets. Its debut ranked in the top 1% of ETF launches by volume and early adoption.
The proposed ETH and SOL funds remain preliminary, and shares cannot be sold until the registration statements become effective. No firm launch dates have been announced. SEC effectiveness and subsequent asset flows would show whether Morgan Stanley’s combination of low fees, staking income and bank-backed distribution can win market share.
The cryptocurrency market dynamics have been consistent over the years, with prices fluctuating in cycles and trends. Such a pattern triggers discussions among crypto community members, particularly key opinion leaders and experts who explore researched data and historical trends to predict the future.
Notably, the evolving nature of the Bitcoin ecosystem triggers sentiments that differ from the digital asset’s early days. Experts analyzing this new phase, alongside developments in alternative cryptocurrency ecosystems, are projecting the crypto market, leaving pointers of what users should expect.
Bitcoin is a Scarce Commodity
One such expert and key opinion leader is Samson Mow, CEO of Jan3, a blockchain project that aims to accelerate hyperbitcoinization. In a recent interview, Mow highlighted the scarcity of Bitcoin that many users have yet to recognize. According to Mow, most people still don’t get what true scarcity means.
🚨 BIG Bitcoin Scarcity Warning from @Excellion (SAMSON MOW, CEO of @JAN3com) 🚨 — COACHTY (@TheRealTRTalks) July 8, 2026
Most people still don’t get what true scarcity means.
“There’s so much demand right now — from $Strategy, ETFs, nation-states, and regular HODLers — that most of the year’s mined $BTC supply is… pic.twitter.com/i2v1BvUadC
The renowned Bitcoin expert explained that there is so much demand for Bitcoin from Michael Saylor’s Strategy, ETFs, nation-states, and regular HODLers. He noted that demand is so high that most of the year’s mined $BTC supply has already been taken up multiple times over.
Mow cited a pattern among many Bitcoiners who typically postpone buying $BTC during pullbacks, expecting that the price would drop further. He emphasized that “there is no later” with Bitcoin, predicting the price will return above $100,000 soon. According to Mow, every institution on earth wants a share of the 21 million Bitcoin supply, which would make the cryptocurrency more expensive in the future.
For context, BlackRock has reportedly resumed accumulating $BTC. After recording steady outflows for approximately two weeks, the asset manager reversed course by purchasing $250 million worth of Bitcoin over the past two days. Besides direct purchases, on-chain data show several $BTC transfers from Coinbase Prime to the IBIT BlackRock wallet, valued at around $17 million to $19 million.
BlackRock’s crypto asset holdings have crossed $50.3 billion, comprising 730,440 $BTC, equivalent to $45.52 billion, and 2.752 million $ETH worth $4.79 billion. According to experts, BlackRock’s crypto accumulation pattern indicates that institutional demand for $BTC and $ETH remains unabated.
Ethereum Remains in Demand
Popular crypto influencer, identified as Tanaka on X, aligns with the growing $ETH demand philosophy. Tanaka described the propagation of settlement layers, such as the Robinhood Chain and the Arbitrum Orbit, as clear examples of how TradFi can move on-chain via L2s. He noted that these solutions create scenarios that funnel into increased demand for $ETH.
Tanaka highlighted the recent surge in meme activity on these chains, noting that the solutions go beyond that, covering real-world assets (RWAs), stock tokens, lending, and DeFi. According to Tanaka, L2 activities settle back to Ethereum, $ETH gas creates demand for using the cryptocurrency, while stock tokens, such as NVDA, AAPL, and GOOG, are going on-chain, all boosting demand for $ETH.
Meanwhile, Tanaka cited a scenario that could create more demand for Ethereum—Robinhood onboarding retail TradFi into tokenized stocks and DeFi. According to him, that would be a very positive signal for $ETH. In the meantime, Ethereum is used as the settlement layer for RWA, DeFi, and traditional financial products.
It is worth noting that developments around the Robinhood Chain are not the only factors behind $ETH’s potential demand. Tanaka noted that, despite considering it a positive catalyst, $ETH still depends on $BTC, macro, ETF flows, and Ethereum upgrades to sustain its momentum and remain relevant in the cryptocurrency ecosystem.
The Latest Meme Coin Narrative
Besides Bitcoin and Ethereum, crypto experts consider the meme coins ecosystem another relevant sector of the crypto market, despite the changing dynamics. Zippy, a key opinion leader in the meme coin sector, stated that the lifecycle of meme narratives is getting shorter with every cycle. According to him, what used to last for days or even weeks now often fades within 24 hours.
Zippy noted that most meme tokens experience sharp corrections as soon as liquidity rotates elsewhere. He explained that the new pattern does not mean the meme market is over. Instead, it signifies that capital is rotating at a much faster pace, and rather than staying with one token, the market is constantly chasing the next story.
The meme coin opinion leader noted that the new ecosystem narrative has emerged with meme waves led by ecosystems attracting fresh liquidity rather than old narratives trying to recover. He identified Robinhood as one of the leading ecosystems currently drawing attention in the meme coin sector.
However, Zippy noted that timing matters as much as conviction in the current meme ecosystem dispensation. According to him, sometimes, knowing when to exit is more valuable than knowing when to buy.
Related:Bitcoin Scarcity Gets Real as 403K $BTC Leaves Exchanges
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