Dennis Porter, CEO and co-founder of Satoshi Act Fund, caused a stir in the financial and bitcoin community yesterday, July 18, with an alleged leak via x. Porter announced what could be big news for btc. “BIG NEWS: Trump to announce US bitcoin Strategic Reserve in Nashville – Sources,” Porter wrote.
Next week, the annual bitcoin conference will be held in Nashville from July 25-27. Although details remain scarce and the source anonymous, this statement has sparked intense debate within the cryptocurrency community and beyond. Notably, the market has shown restraint and maintained a cautious stance on the developing news.
How Trump could turn bitcoin into a reserve asset
Today, Porter x.com/Dennis_Porter_/status/1814063064142250229″ target=”_blank” rel=”noopener nofollow”>bent In his opening statement, he offered a more detailed look at how President Trump could feasibly integrate btc into the US strategic reserves. He emphasized: “Adding bitcoin as a strategic reserve would be a decisive victory for the United States and for bitcoin, but some are asking ‘how can it be done?’” He then suggested a method that would use an existing financial mechanism to achieve this.
The mechanism in question is the Exchange Stabilization Fund (ESF), a financial tool managed by the US Treasury. Established by the Gold Reserve Act of 1934, the ESF’s primary function has been to stabilize the value of the US dollar by intervening in the foreign exchange and gold markets. Porter’s proposal represents a novel expansion of this mandate to include btc, which is considered a foreign currency in the financial world due to its decentralized nature and global use.
Porter outlined the process by which bitcoin could be integrated into the ESF. He suggested that btc could be held as part of the ESF’s reserve assets, similar to its holdings of foreign currencies and gold. This would not only diversify the ESF’s assets, but also provide a strategic hedge against inflation and currency devaluation.
In terms of operational strategy, the ESF could transact in bitcoins to stabilise or influence its exchange rate, particularly in relation to the US dollar. This approach would mirror the ESF's current operations with other foreign currencies and gold. In addition, during periods of financial instability, the ESF could provide bitcoin liquidity to markets or institutions, thereby helping to stabilise financial conditions and reinforce market confidence.
Porter also proposed a major policy initiative to bolster btc reserves without impacting the open market. He suggested, “End Marshall auctions of confiscated bitcoin in the U.S. and transfer the $5.5 billion worth of btc to the Treasury’s European Social Fund (ESF). This action would require an executive order and could strategically enhance U.S. reserves without requiring market purchases, which could otherwise impact btc’s market price.
Alex Thorn, research director at Galaxy Digital, commented on Porter’s theory. He said that while the ESF represents a viable option for this type of strategic initiative, it may not be the only path. He said: “We will be publishing a report on this shortly. The ESF is one possibility among many, but the clearest path is new enabling legislation, namely the Energy Policy and Conservation Act that created the SPR.”
As Bitcoinist reported yesterday, Matthew Pines, director of Sentinel One and a National Security Fellow at the bitcoin Policy Institute, shared a similar assessment. Steven Kelly, associate research director at the Yale Financial Stability Program, believes the ESF route is “feasible, particularly if it is simply considered reallocating reserves to include btc.”
At the time of writing, btc was trading at $63,804.
Featured image from YouTube / What bitcoin Did, chart from TradingView.com