VanEck Backs Trump’s Bitcoin Reserve Plan: BlackRock Remains Cautious

TLDR:

• VanEck’s head of research officially endorsed Trump’s Bitcoin strategic reserve proposal
• BlackRock reportedly skeptical despite holding significant Bitcoin through ETFs and investments
• Senator Cynthia Lummis proposes selling US gold reserves to acquire Bitcoin
• Florida and Pennsylvania moving forward with state-level Bitcoin reserve initiatives
• Bitcoin reached new all-time high of $94,000 amid strategic reserve discussions

In a direct endorsement on Tuesday, VanEck’s head of digital asset research, Matthew Sigel, publicly supported former President Donald Trump’s proposal for a national Bitcoin reserve. This move highlights growing interest in Bitcoin as a potential government asset, even as major players like BlackRock maintain a more reserved stance.

FOR IMMEDIATE RELEASE:

VanEck Endorses Strategic Bitcoin Reserve.

No need for 'sources'—we'll just tell you ourselves. https://t.co/ZO28dqiBqC

— matthew sigel, recovering CFA (@matthew_sigel) November 19, 2024

The proposal for a national Bitcoin reserve gained momentum after Trump’s campaign speech four months ago, where he discussed replacing SEC leadership and emphasized Bitcoin’s role in America’s future. The former president’s plan includes appointing a pro-Bitcoin Treasury Secretary and using executive orders to begin building the reserve.

Dennis Porter, CEO of the Satoshi Action Fund, outlined the practical steps for establishing such a reserve. These steps include halting the current practice of auctioning Bitcoin held by the US Marshals Service and transferring these assets to the Treasury’s Exchange Stabilization Fund.

At the state level, both Florida and Pennsylvania have shown interest in creating their own Bitcoin reserves. Florida’s Chief Financial Officer publicly endorsed a Bitcoin strategy, while Pennsylvania lawmakers introduced legislation to establish state-level holdings.

BlackRock, despite its large presence in the Bitcoin market, has taken a different approach. Fox Business correspondent Eleanor Terret reported that sources close to BlackRock indicate the company does not endorse a strategic Bitcoin reserve. This stance comes even as BlackRock’s Bitcoin ETF surpassed $40 billion in assets under management, setting industry records for growth.

SCOOP: Sources close to @BlackRock tell @FoxBusiness the big money manager is not endorsing a strategic $BTC reserve despite recent reports that it is.

— Eleanor Terrett (@EleanorTerrett) November 19, 2024

Data from Arkham shows BlackRock currently holds 471,707 Bitcoin, valued at approximately $43.53 billion. The company has increased its exposure through both its IBIT ETF and direct investments, including stakes in MicroStrategy, a company known for its large Bitcoin holdings.

Some market observers suggest BlackRock’s interest lies more in blockchain technology for asset tokenization rather than direct Bitcoin adoption. “BlackRock is playing the Franklin Templeton game—they are pushing the ETF but know they are really here for the tokenization,” noted one market commentator on social media.

Senator Cynthia Lummis has emerged as a key supporter in Congress, proposing to sell portions of US gold reserves to acquire Bitcoin. Her involvement adds a legislative dimension to the campaign, as executive orders alone could be reversed by future administrations.

The movement has attracted international attention, with Polish libertarian leader Sławomir Mentzen pledging to pursue a similar strategy if elected. This shows how the concept of government Bitcoin reserves has spread beyond U.S. borders.

Billionaire investor Mike Novogratz recently expressed doubts about the proposal’s feasibility.

“It’s a low probability. While the Republicans control the Senate, they don’t have close to 60 seats,”

he stated, adding that Bitcoin’s volatility remains a concern for government adoption.

The market has responded to these developments, with Bitcoin reaching a new all-time high of $94,000 before settling at $93,380, marking a 40% increase in two weeks. This price movement reflects growing investor interest in Bitcoin’s potential role in government finances.

Recent BlackRock statements acknowledge the changing landscape:

“There is a renewed sense of optimism that regulatory clarity for bitcoin and digital assets more broadly may emerge following the US election. President-elect Donald Trump campaigned on maintaining a strategic bitcoin reserve, while pro-crypto politicians in the House and Senate races from both sides of the aisle enjoyed electoral success.”

As of the latest market data, Bitcoin trades at $93,00, showing continued strong performance amid these discussions about its potential role in national reserves.

The debate continues between those who see Bitcoin as a crucial addition to national reserves and others who question its readiness for such a role. The contrasting positions of major financial institutions like VanEck and BlackRock reflect broader market uncertainty about Bitcoin’s future in government finance.

Porter also noted that congressional action would be needed to establish a permanent Bitcoin reserve, as executive orders can be reversed by future administrations. This highlights the importance of legislative support for any long-term changes to national reserve policy.

The post VanEck Backs Trump’s Bitcoin Reserve Plan: BlackRock Remains Cautious appeared first on Blockonomi.