Trump Administration Plans Bitcoin Purchases With Tariff Revenue

The Trump administration has unveiled a plan to utilize tariff revenue for the acquisition of Bitcoin, a move that could significantly impact the cryptocurrency market. This strategy is part of a broader agenda to position the United States as a global leader in crypto adoption. Bo Hines, Executive Director of Digital Assets, revealed during an interview that the U.S. government is considering using revenue generated from tariffs to purchase Bitcoin. Additionally, the administration is exploring the option of revaluing gold certificates at the U.S. Treasury to secure extra funding for Bitcoin acquisitions.

This initiative comes at a time when global financial markets are highly responsive to tariff announcements. The Trump administration aims to raise substantial revenue through higher tariffs, which could be channeled into Bitcoin purchases. However, the financial markets and the broader crypto market have shown varied reactions to these tariff episodes. Bitcoin, in particular, has demonstrated resilience despite the volatility caused by tariffs. On-chain data indicates that Bitcoin has maintained relative strength, with wallets holding 10 or more BTC reaching an all-time high of 16.36 million BTC. This suggests that large holders, often referred to as "sharks" and "whales," are bullish and anticipate that Bitcoin will remain stable during this period of uncertainty.

The behavior of large holders is further evidenced by the whale flow ratio to exchanges, which dropped to a weekly low of -0.34%. This indicates that whales are not selling their holdings and are instead accumulating more Bitcoin. The amount of available BTC on exchanges has also been declining, signaling that traders are holding onto their assets for the long term. The sustained decline in the sell-side risk ratio, which fell to 0.001 in April, suggests that investors, especially long-term holders, are less inclined to sell, expecting the price to rise higher in the near term.

Channeling tariff revenue into Bitcoin could restore confidence among retail traders and turn market participants bullish. This announcement is positive for Bitcoin and could drive the price higher, especially as investor confidence in the administration returns. While tariffs have negatively affected the financial market, Bitcoin has shown strength and rebounded from tariff-related dips. If the U.S. government uses tariff revenue to buy Bitcoin, investors and holders may start perceiving tariffs positively, eroding market concerns. This shift in sentiment could see Bitcoin reclaim pre-liberation day levels of around $88,500. However, if investors are not fully convinced about the policy, Bitcoin may continue to consolidate between $83,000 and $85,000.