Emily Walker
In a development that may greatly influence Bitcoin (BTC) and the entire cryptocurrency realm, President Donald Trump authorized an executive order on Monday to create a sovereign wealth fund aimed at fostering economic growth.
This step aligns with Trump’s ongoing objective to utilize Bitcoin and other digital assets in shaping the nation’s economic agenda, a commitment he expressed during his previous campaign.
Will Bitcoin Be Incorporated into US Financial Holdings?
During a recent press conference, US Treasury Secretary Scott Bessent suggested that the government plans to “monetize the asset side of the US balance sheet for the American populace” within the coming year.
Bessent further explained that the fund would cover various liquid assets and domestic resources, indicating a potential transformation in the US’s financial asset management approach.
Although the executive order does not explicitly mention Bitcoin or other cryptocurrencies, its objectives include enhancing fiscal responsibility, alleviating tax pressures on American families and small businesses, and strengthening the nation’s global economic and strategic standing.
The fund is also anticipated to finance vital infrastructure initiatives, such as airports and highways, which could enhance US sway in strategically significant areas like Panama and Greenland.
Bessent, along with Commerce Secretary nominee Howard Lutnick—who supports Bitcoin and cryptocurrency—will formulate a strategy for the fund within 90 days of the order’s issuance.
Pending additional specifics, this action may coincide with a growing movement among sovereign wealth funds to investigate Bitcoin and digital assets as part of their investment practices.
An Investment Model for the US
Norway’s sovereign wealth fund, which is the largest globally with assets exceeding $1.7 trillion, serves as a prominent case in point. As per the Sovereign Wealth Fund Institute, the Norges Bank Investment Management (NBIM) has witnessed a 153% uptick in its indirect Bitcoin exposure in 2024.
This rise, from 1,507 BTC at the close of 2023 to 3,821 BTC by the end of 2024, illustrates a rising acceptance of Bitcoin in institutional investment approaches, even if it is not directly targeted.
Crypto analyst Vetle Lunde pointed out that this growing Bitcoin exposure among major institutional players signifies its evolution into a vital part of investment portfolios.
Lunde also noted that NBIM has increased its stakes in Bitcoin-related businesses, including mining company Riot Platforms and the Japanese firm Metaplanet, while still holding considerable investments in MicroStrategy, contrary to earlier expectations of a decline in exposure.
The possibility of a similar strategy from Trump’s administration hints at a significant shift toward integrating Bitcoin and other digital assets within the US economic landscape.
Experts like Lark Davis have highlighted the far-reaching effects of this executive order, suggesting that it may allow the sovereign wealth fund to invest in stocks and cryptocurrencies, thus marking a pivotal change for the market.
As the administration gets ready to share more insights, the activities of the newly appointed White House Crypto Czar will be under close observation, particularly during his forthcoming conference on Tuesday.
Featured image from DALL-E, chart from TradingView.com