Trump Doesn't Need Powell And Fed Approval To Launch Strategic Bitcoin Reserve Fund

Last week, Federal Reserve Chairman Jerome Powell wanted everyone to know one thing: the Federal Reserve will not touch Bitcoin. Not now, not ever. In the press conference following the Fed's monetary policy meeting, Powell made it clear that any plans to hold Bitcoin would not receive his support. What was the result? The cryptocurrency market immediately plunged. The price of Bitcoin, which had risen earlier this week, has experienced a sharp decline. The betting odds of Bitcoin Strategic Reserve (BSR) have dropped from 40% to 34% on Polymarket just a few hours after Powell's statement. Meanwhile, the entire cryptocurrency market has lost 7.5% of its value, wiping out billions of dollars in an instant. It's no surprise that traders are panicking. But the issue here is, a recent report on Wu Blockchain has pointed out that Trump does not need the Fed's approval to start hoarding BTC, as we were initially concerned. Trump's legal solution But Trump doesn't care about what Powell says. Why? Because the fact is Powell really can't stop him. If Trump wants to have a Bitcoin Strategic Reserve Fund, he doesn't need Powell or the Fed. He can go directly to the U.S. Treasury Department and do it by executive order. This is how it works: The Treasury controls something called the Exchange Stabilization Fund (ESF). This fund is created to stabilize the US dollar and address financial crises. The fund holds assets such as gold, US dollars, and Special Drawing Rights (SDR). What the fund has not held is Bitcoin. Trump can issue an executive order instructing the Treasury Department to change that. Simple. Unlike most government spending, the ESF does not require congressional approval. This gives the President and the Secretary of the Treasury unusual control over the use of the fund. During the COVID-19 pandemic, the Ministry of Finance has utilized the ESF to rescue the market, and the Congress had to compete afterwards to impose restrictions. If Trump uses this fund to buy Bitcoin, the Congress may investigate, but by that time, the purchase transactions may have already been conducted. This is a quick and dirty option, but not invulnerable. Executive orders are not permanent. Another President could come in, undo Trump's Bitcoin initiative, and move ESF money back to safer, more traditional investments. However, as a short-term strategy, this is a way to completely bypass Congress. A legal road passes through the National Assembly Republican Senator Cynthia Lummis has proposed legislation for this issue. Her "Strategic Bitcoin Reserve Act of the United States" is currently being reviewed by the Senate Banking Committee. The problem here is that: passing a law in Congress is not easy. Even with a Republican majority, bipartisan support is rare these days. This process could take months, if not years. Both the House and the Senate must approve the bill before Trump can sign it into law. Why bother with the legislative process? It brings stability. Unlike an executive order, a law cannot be easily revoked by the next administration with a stroke of a pen. A task of Congress will lock Bitcoin into the US financial system as a strategic asset, creating a framework for future reserves. For Trump, this is a gamble. The legislative process is slow and cryptocurrencies do not really receive unanimous support on Capitol Hill. But if successful, this will be the strongest support for Bitcoin as part of the future of US finance, just as he has always said. What about the Federal Reserve? Some may wonder if the Federal Reserve can start buying Bitcoin. In theory, they can. The Fed conducts open market operations at all times, buying and selling assets like government bonds to stabilize the economy. But Powell's comments suggest that this will not happen soon. “The Fed is not the place for Bitcoin,” Powell said. That's a pretty definite no. Even if the Fed wants to buy Bitcoin, they would also need a new policy framework and may need some changes to existing laws. Powell made it clear that he is not interested in promoting either. This makes the Treasury the only real choice for government-led Bitcoin reserves. And although Powell may not like this idea, he cannot prevent the Treasury from acting independently. Trump factor Trump appointed Powell as the Chairman of the Fed in 2018, but their relationship immediately turned sour. The President spent much of his first term criticizing Powell for raising interest rates, even threatening to fire him multiple times. Returning to 2024, nothing has changed. Trump still sees Powell as an obstacle and he really wants to keep this position. It's interesting that the President's family cryptocurrency project, World Liberty, wasted no time responding to Powell's speech. Data on the chain shows that the project started buying altcoins just two minutes after the press conference began. They all almost immediately witnessed a loss, but we don't think Trump cares. DYOR! #Write2Win #Write&Earn $BTC {spot}(BTCUSDT)