U.S. President Donald Trump has signed an executive action to establish a sovereign wealth fund, drawing attention from the crypto industry. Key figures are Treasury Secretary Scott Bessent and Commerce Secretary nominee Howard Lutnick, known for their ties to Bitcoin. Discussion arises about potential crypto asset inclusion.
What is a Sovereign Wealth Fund?
Sovereign wealth funds are state-owned investment vehicles that reinvest government revenues into a variety of assets like stocks, bonds, and real estate. Some are funded by natural resource profits, others by trade surpluses.
How Will the U.S. Fund It?
Unlike resource-rich nations, the U.S. operates with a budget deficit. Trump has suggested that tariffs and other revenue streams could assist in funding the fund. Recent tariff announcements have influenced financial markets, with changes seen in Bitcoin prices. Public-private partnerships are also being considered to bolster the fund’s resources.
Bitcoin and the U.S. Sovereign Wealth Fund
Howard Lutnick, nominated for Commerce Secretary, is known for his Bitcoin advocacy and personal investments. Senator Cynthia Lummis reacted to the announcement, highlighting its potential significance. As regulatory approaches may shift, there's anticipation for Bitcoin's inclusion.
The executive action mandates a detailed plan submission within 90 days with a 12-month rollout to follow. The fund could be used for monetizing U.S. assets and potentially facilitate TikTok's acquisition.
