U.S. President Donald Trump has signed an executive action directing the creation of a sovereign wealth fund, capturing crypto industry interest for potentially including Bitcoin.
What Is a Sovereign Wealth Fund?
Sovereign wealth funds (SWFs) 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 nations, the U.S. operates with a budget deficit. Trump suggested that tariffs and other revenue streams could fund the sovereign wealth fund. Recent tariff announcements have impacted financial markets, causing Bitcoin to briefly fall below $91,000. Sources indicate public-private partnerships might also be explored to bolster fund resources.
Bitcoin and the U.S. Sovereign Wealth Fund
Howard Lutnick, a well-known Bitcoin advocate and Trump's pick for Commerce Secretary, could influence the fund's inclusion of cryptocurrency. Senator Cynthia Lummis, another Bitcoin supporter, remarked it’s a “₿ig deal” following the announcement. Under Trump's administration, there’s speculation the U.S. government may shift towards a more crypto-friendly stance, igniting debate about potential Bitcoin accumulation.
The executive order mandates a 90-day plan submission, detailing investment strategies and fund structure, aiming for operational launch within a year. Trump hinted at utilizing the fund for possibly acquiring TikTok.
