White House Crypto Summit – action or inaction?

FRIDAY saw the first of what may prove to be many crypto summits at the White House.

Amongst officials and Trump’s own crypto person (Zak Witkoff) were industry heavyweights  Michael Saylor, Coinbase co-founder and CEO Brian Armstrong, investors Cameron and Tyler Winklevoss, and entrepreneur David Bailey.

The main session was in camera, but everyone seems to have agreed that it was worthwhile.

Apart from David Sacks getting the Winklevoss twins mixed up, everything seems to have gone well.

Trump had of course already made an executive order setting up the Bitcoin reserve. Interestingly, officials admitted they did not know how many BTC the US Government already owned and as a first step, they would perform an audit to find out.

The general belief is they hold around 200,000 BTC or so with a current value of around $20 billion – peanuts in the scheme of things. He has said it will never be sold and David Sacks has said it should have been set up long ago.

Trump has mandated that the reserve is to be built using “budget neutral strategies” which means not using tax dollars. I’m not entirely sure how they might do that but here’s a thing.

It has been suggested that whoever the eventual holder of the reserve might be, they could add to it using US T-bills (Treasury Bills). At the end of the day there would be interest to pay on them (I assume) but it would be a very neat solution.

My only reservation is that in a way that is what Michael Saylor of Microstrategy has been doing – and I’m not convinced that is going to end well.

Brad Garlinghouse of Ripple (a big Trump supporter) was also in attendance and in some ways has the biggest skin in the game. Ripple holds massive reserves of XRP in escrow and could do a deal direct with the government.

My own view is that all participants are feeling their way at the moment and don’t want to commit to something they might then need to row back on. But the consensus is absolutely that the administration regards crypto as a mainstream asset class, and that has to be right.

Treasury Secretary Scott Bessent made it clear the US was going to keep the dollar as the world's reserve currency. From various moves in the past few weeks it looks like the might of stablecoins (USDT/Tether in particular) is going to be harnessed to do that.

Tether's annual settlement volume already surpasses $18 trillion, which is more than both Mastercard and Visa. For absolutely sure, crypto front runners feel they are now collaborating with the administration rather than having to fight them all the way.

Clarity on who the regulators will be and what policies they will enforce must be very close and that alone will boost trust in crypto.

With all this positive news, why has Bitcoin not gone to a new all-time high? Sadly, I have no definitive idea, except you should always buy on the rumour and sell on the fact. In this case the fact is that the US Treasury is NOT going to wade into the markets, which is what would be needed to boost the price.

It feels that what might be termed 'no massive Microstrategy purchases' has finally had an effect. As I pointed out some time ago, the amounts of money needed to take Bitcoin to $150,000 is something approaching $1.3 TRILLION. That’s quite a lot of cash, even today.

And now for a terrible admission on my part. Whenever I hear Trump mentioned I’m sorry to say the song “Nellie the Elephant” plays in my brain. “Trump! Trump! Trump!” 

That surely says it all.