U.S. President Donald Trump signed an executive action to establish a U.S. sovereign wealth fund. This move has attracted attention in the crypto industry due to the notable leaders behind it and their ties to Bitcoin.
What Is a Sovereign Wealth Fund?
Sovereign wealth funds are state-owned investment funds that reinvest government revenues into various assets, such as stocks, bonds, and real estate. Some SWFs are funded by natural resource profits, while others leverage trade surpluses.
How Will the U.S. Fund It?
Unlike oil-rich countries that use surplus revenues, the U.S. operates with a budget deficit. Trump has suggested that tariffs and other revenue streams could help finance the fund. Recent tariff announcements have already impacted financial markets, with Bitcoin briefly dropping below $91,000 before recovering above $100,000. Some sources believe the administration could also explore public-private partnerships to bolster the fund’s resources.
Bitcoin and the U.S. Sovereign Wealth Fund
Howard Lutnick, CEO of Cantor Fitzgerald and Trump’s pick for Commerce Secretary, is a well-known Bitcoin supporter. His firm custodies Tether’s U.S. government securities, and he has publicly disclosed his personal Bitcoin investments. Senator Cynthia Lummis, a strong Bitcoin advocate, reacted by suggesting Bitcoin accumulation could be part of the fund’s strategy. While there is no official confirmation, the possibility of Bitcoin being included in the fund has sparked debate. Some believe this could mark the beginning of U.S. government Bitcoin accumulation, similar to actions by countries like El Salvador.
Within the next 90 days, officials must submit a detailed plan for the fund's creation, including investment strategies and governance structure. The fund is expected to be operational within 12 months, with potential uses including the acquisition of TikTok.
