Trump's Sovereign Wealth Fund: A New Future for Crypto Investing
The creation of a sovereign wealth fund (SWF) initiated by former President Donald Trump is attracting a lot of attention from crypto investors. The purpose, funding, and investment portfolio of the fund are still unclear, but it is opening the door for the US to participate in the crypto market in a more flexible way.
Trump initiates sovereign wealth fund
Donald Trump signed an executive order on Monday, requiring the US Treasury and Commerce Departments to establish a sovereign wealth fund within the next three months. A SWF is a state-owned investment mechanism, used to increase profits and support economic and social programs.
According to the White House, "The United States holds a huge amount of assets, worth $5.7 trillion, that can be invested through SWFs to grow long-term wealth."
President Trump has suggested that tariffs on imports could be a source of funding for the fund. If it is created, the United States would become one of the countries managing SWFs worth hundreds of billions of dollars.
Cryptocurrency Market Expectations
The two figures behind the initiative, Treasury Secretary Scott Bessent and Commerce Secretary nominee Howard Lutnick, are both cryptocurrency investors. While the executive order does not directly mention Bitcoin, Senator Cynthia Lummis tweeted with the Bitcoin symbol and commented: "This is a Copper deal.
The cryptocurrency community believes that SWFs could be a shortcut for the US to invest in Bitcoin without facing many regulatory hurdles. According to New York-based entrepreneur Austin King, "SWFs would have fewer controls and require fewer approvals. Trump is creating a fast-track to deploy an investment fund without too much bureaucracy.
Challenges and the Future
While crypto investing is a potential avenue, the Federal Reserve (Fed) has maintained a neutral stance. Last week, Fed Chairman Jerome Powell stated that Bitcoin will not become a strategic asset for the Fed.
However, with Trump’s positive stance on Bitcoin, this new SWF could ensure that the US will own a significant part of the global crypto ecosystem.