Trump's "vision" makes waves again: Bitcoin, the new darling of the US strategic reserve?

Recently, at the Bitcoin 2024 conference held in Nashville, Tennessee, in an almost prophetic manner, Trump declared that if he returned to the White House, Bitcoin would be included among the strategic reserve assets of the United States, which instantly ignited a frenzy in the market, and also attracted the irony and criticism of many calm observers.

First, the "big picture" should be viewed in a more rational light. Mr. Trump's reference to "the government keeping 100% of the bitcoins it owns" sounds determined, but on closer examination, one can't help but question the motivation and feasibility behind it. Does the U.S. government really hold such a large amount of Bitcoin? Even if true, was this decision adequately assessed for fiscal and financial risk? The inclusion of a highly speculative asset with a highly volatile value as a national strategic reserve is certainly a bold challenge to conventional notions of financial stability, and the logic behind it seems to have more to do with political speculation than deliberate national strategy.

What is even more ironic is that Trump's comments quickly triggered a "roller coaster" in the price of bitcoin, which makes people wonder whether this is a real recognition of the value of Bitcoin, or a well-planned market manipulation. Bitcoin, the digital currency that was originally intended to be decentralized and inflation-proof, has now become a "muppet" on the political stage, with its price dancing with political weather indicators, which is undoubtedly a mockery of its original intention.

The proposed Bitcoin Strategic Reserve legislation by Wyoming State Senator Cynthia Lummis is taking this political game to a new level. The logic behind trying to legislate to force the Fed, the guardian of the global financial system, to embrace an asset class full of unknowns and risks is staggering. The Federal Reserve, as the guardian of global financial stability, is responsible for maintaining the independence and effectiveness of monetary policy, rather than becoming a "feeder" for a particular asset.

Mr. Trump's prediction that the market value of Bitcoin will surpass gold is full of strong personal colors and subjective assumptions. Gold has been recognized as a safe haven asset for thousands of years, and its value comes from its scarcity, historical precipitation and wide international acceptance, while Bitcoin, a digital currency born more than ten years ago and whose value is completely determined by market supply and demand, wants to shake the status of gold in the short term, which is tantiqua fantasy. Trump's comments seem more like an attempt to fuel his own political campaign than a rational analysis based on objective facts.

What is more serious is that this series of statements by Trump has undoubtedly exacerbated the bubble tendency of the cryptocurrency market. Fueled by political forces, investors are piling into this tempting but dangerous market to get a piece of the next bull market. But when the political glow fades, what may be left behind is a field of chicken feathers and the blood of countless investors.

As for other support measures for the cryptocurrency industry mentioned by Trump, such as the dismissal of the current SEC chairman and the establishment of the Bitcoin Presidential Advisory Council, it is full of uncertainty and risk. The implementation of these measures not only faces the complexity of legislative procedures, but also may cause widespread disputes and resistance at the political and economic levels. Mr Trump's political skills may be able to push these issues forward to some extent, but whether they can actually be implemented remains to be seen.

Trump's comments about Bitcoin becoming a strategic reserve asset for the United States resemble more political theater than serious national strategy. In this show, politics and finance, reality and fantasy intertwine in a way that makes it hard to tell the real from the fake. For every rational investor and observer, keeping a clear head and prudent attitude is the best strategy to deal with this "digital currency storm".