US to Consider Bitcoin for Strategic Crypto Reserve

A strategic reserve, as the name suggests, is a stockpile of resources intended for future use when the need arises. In the United States, the government maintains strategic reserves of diesel fuel and grain to ensure the continuity of supply in case of disruptions. Similarly, a strategic crypto reserve could serve a purpose in the digital asset ecosystem.

Bitcoin, with its proven resistance to major long-term corrections and uncorrelated nature with the rest of the crypto market, is a strong candidate for a strategic reserve. Its primary use case, buying and holding long-term, aligns well with the goals of a strategic reserve. In the future, the US could potentially sell its bitcoin holdings to fund initiatives for the common good or pay off debt.

The closest examples to a US strategic crypto reserve currently are the $20 billion in BTC seized through criminal cases and the growing strategic reserve maintained by World Liberty Fi, a DeFi project. World Liberty Fi has spent over $300 million on seven different coins since the end of November, with nearly two-thirds of it going to ETH. However, the portfolio is currently in the red by about 14% on all of its purchases to date.

If World Liberty Fi's crypto portfolio is indeed Trump's anticipated strategic reserve, it would need to be actively managed, especially as we approach the next bear market. Active management would help mitigate potential losses and ensure the portfolio's long-term sustainability. Without proper management, labeling the portfolio as "strategic" could become embarrassing if it continues to decline in value.