U.S. Could Use Gold Holdings to Fund Bitcoin Reserve
According to Bo Hines, a senior Whitehouse advisor on crypto who spoke on the Crypto in America Podcast, the US could cash in on its gold holdings to fund its Strategic Bitcoin Reserve (SBR).
Hines suggested that the Trump administration would explore creative ways of funding the SBR without further burdening the American taxpayer. His sentiments seem to be an attempt to pacify Americans, many of whom, according to a recent survey, oppose the SBR. The Data for Progress advocacy group poll showed 51% of American voters disapprove of the idea, placing it last on the list of priority areas for federal funding.
America’s Budget-Neutral Means of Financing Its SBR
Hines explained that his think tank had received countless ideas on how to fund the SBR. He hinted that the choices would have to be budget-neutral. The US could use the gains from its gold certificates to acquire more Bitcoin.
The crypto council head honcho also noted that the certificates were massively undervalued compared to actual gold values. Therefore, obtaining their correct valuation, as Senator Cynthia Lummins’ Bitcoin Act 2025 proposes, would give America the finances it needs to build its BTC stash. He stated, “If we actually realize the gains on these holdings, that would be a budget-neutral way to acquire more Bitcoin.”
How Does Revaluing the Gold Certificates Work?
Lummins’ push, and thus Hines’ stance, has merit. According to the Federal Reserve Bank of St Louis, the Fed banks holding gold certificates value them at $42.22 per troy ounce. This figure is significantly lower than the market value of $3,037 for the same unit of gold.
America owns about 8,133 metric tons of gold, translating to 260.8 million troy ounces (1 metric ton = 32,150.7 troy ounces). Gold’s current price gives a market value of roughly $792 billion ($3,037 × 260.8M). The book value is slightly over $11 billion ($42.22 × 260.8M), yielding potential gains of over $780 billion ($792B – $11B).
Revaluing these certificates to align with gold’s market prices could unlock substantial capital. Such a windfall would give the US enough liquidity to establish the SBR without tapping into taxpayer funds.
Overcoming Challenges and Exploring Alternatives
While the financial benefits are evident, questions arise about the scalability of revalued gold certificates. This change could face resistance from the Federal Reserve and the Treasury Department, as it may impact monetary policy and inflation expectations. Furthermore, altering the valuation of gold reserves could present legal and accounting challenges requiring congressional approval. Critics contend that revaluing gold does not create new wealth but only shifts accounting metrics, making it a politically sensitive topic.
Revaluing gold certificates offers promise, but alternative budget-neutral methods deserve exploration as well. The U.S. could consider issuing Bitcoin-backed bonds, akin to El Salvador, or use some of the confiscated assets from criminal crypto operations to fund the reserve. Other experts have suggested tokenizing parts of federal assets and involving private investors in the SBR through decentralized finance (DeFi) methods.
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