GuShiio.com It is not that you cannot increase your holdings, but that you need to be more flexible.
Written by: Deep Trend TechFlow
The good news is that Trump has signed a strategic Bitcoin reserve plan.
The bad news is not the kind you think you can just spend money to buy more BTC.
On March 7, President Trump formally signed an executive order announcing that the United States would establish a Strategic Bitcoin Reserve.
But considering policy details, things do not seem as optimistic as expected.
According to the policy content, the funding source of this Bitcoin reserve is not through direct purchase, but fromBitcoin obtained from criminal or civil asset forfeiture。
In other words, the U.S. government does not use fiscal funds or new taxes to purchase Bitcoin, but relies on related assets confiscated during judicial processes.
This clause clearly disappointed the market because it meant that the size and speed of reserves could be extremely limited and could not even have a direct boost to the Bitcoin market.
After the policy was announced, the price of Bitcoin also fell to a certain extent. Some netizens even joked that everyone was led by the nose by the policy, forming a Sichuan market.
But in addition to what everyone generally believes is not as expected, don’t ignore another keyword in the policy– Budget neutrality.
This clause stipulates that when building a Bitcoin reserve, the U.S. government must ensure that it does not increase the burden on taxpayers; but the Treasury and Commerce Secretaries are empowered to develop budget-neutral strategies to obtain more Bitcoin.
This may seem like a restriction, but it actually opens up more possibilities for policy implementation.
Perhaps the real focus of this policy is not on the scale of confiscated assets or reserves, which is widely concerned about, but the more room for implementation of the budget neutrality strategy:
It’s not that you can’t increase your holdings in BTC,Instead, we need to be more flexible to increase holdings.
Budget neutrality, operation spirituality
What does budget neutrality mean?
Simply put, budget neutrality is a fiscal policy principle that requires the government to implement new policies without increasing the overall fiscal deficit or the burden on taxpayers. In other words, if the government is going to spend a sum of money, it must offset it by cutting other expenditures or increasing revenue.
In this Bitcoin reserve policy, budget neutrality means:The U.S. government cannot directly use its fiscal budget to purchase Bitcoin, but must use some kind of one-way purchase and one-sale method to ensure that the source of reserve funds and expenditures offset each other.
This is why the policy mentions that the initial source of funding for Bitcoin reserves will rely on Bitcoin derived from criminal or civil asset forfeiture.
However, it should be noted that budget neutrality does not mean that the government is completely unable to increase its holdings of Bitcoin through other means.To put it bluntly, this is not a matter of not being able to buy it, but how to buy it.
Budget neutrality designs a closed-loop logic for policy implementation: any additional bitcoin reserves must be achieved through the redistribution of other assets or resources. This mechanism opens up multiple possibilities for policy implementation:
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Achieve reserve targets through asset swaps, such as gold
For example, the government could sell existing reserve assets (such as gold, treasury bonds, etc.) and use the proceeds to purchase Bitcoin. As a result, although Bitcoin reserves have increased, the overall asset size has not expanded, thus meeting the requirement of budget neutrality.
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Bitcoins confiscated through judicial confiscation are directly included in reserves
Governments can use Bitcoin confiscated through judicial processes as a source of reserves. This approach avoids fiscal expenditures, but the size of the reserve depends entirely on the amount of judicial confiscations, and there is great uncertainty.
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Through resource realization or income redistribution
The government can also use the proceeds for Bitcoin reserves through the realization of other resources (such as energy, land, etc.). For example, use idle energy resources to participate in Bitcoin mining, or sell certain non-core assets in exchange for Bitcoin.
This logic of buying and selling is not only a constraint on fiscal discipline, but also a blank space for policy implementation flexibility. It ensures that the government will not increase its fiscal deficit by increasing its holdings of Bitcoin, and also designs multiple paths for specific policy operations.
Is the impact of not buying BTC directly underestimated?
You may ask, since the U.S. government wants to build strategic reserves so much, why doesn’t it directly increase its budget to buy BTC, which makes it so troublesome?
First, it may be to avoid market panic.
If the government directly uses the fiscal budget to purchase bitcoin on a large scale, it may cause market concerns about the credibility of the US dollar and even cause inflationary pressure. Budget neutrality avoids the risk of new fiscal expenditures by buying and selling, and can promote policies more smoothly.
Second, explore the possibility of asset reorganization
Budget neutrality provides the government with the opportunity to reallocate existing assets. For example, by selling gold reserves in exchange for Bitcoin, or by exchanging certain other resource reserves for Bitcoin, adjustments can be made more flexibly based on market prices and the international situation to achieve the purpose of optimizing asset structure, and can also be more competitive in international relations and assets.
hereThe key points are:Budget neutralityGovernment initiative is not ruled outincreaseBitcoin,Instead, it requires some kind of trade-in or small trade-in to achieve the reserve target.
The market’s current disappointment is likely due to the neglect of the flexibility hidden behind budget neutrality. In fact, this clause not only does not restrict the implementation of the policy, but opens up more possibilities for it.
According to the possibility that the King understood not to play by the routine, this also gives him more room for interpretation.
But at present, the market’s reaction seems to be not interested enough in this policy. Both gold and bitcoin prices have fallen after the policy came out.
Peter Chung, director of research at Presto Research, posted that BTC did not show a positive response, indicating that there are a certain number of “Buy the Rumor, Sell the News” type activities in the market. rdquo;
Behind this short-term volatility may reflect the market’s misunderstanding of policy logic.
The market originally expected the U.S. government to purchase Bitcoin directly with its fiscal budget. This method would not only quickly expand the size of reserves, but also bring obvious purchasing pressure and push the price of Bitcoin up. However, the policy chose a budget-neutral approach, and this operating logic was interpreted as insufficient strength in the short term, triggering selling sentiment.
In fact, budget neutrality does not mean a reduction in policy strength, but provides greater flexibility for policy implementation. As the policy terms indicate, finance and commerce secretaries are authorized to develop multiple strategies to obtain Bitcoin reserves, an approach that trades the old for the new or trades the small for the big that may unleash greater potential in the future.
In the short term, the market is paying more attention to the size and speed of Bitcoin reserves, and it is reasonable that the current price performance is not as good as expected.
However, long-term macro environment changes cannot be ignored.
If the U.S. government gradually increases its holdings of Bitcoin through a budget-neutral approach, it will send a solid signal to the market that Bitcoin is transforming from a speculative asset to a reserve asset. This signal could trigger other countries to follow suit, accelerating the globalization of Bitcoin.
Especially if the U.S. government really sells gold in exchange for Bitcoin, this asset swap will further consolidate Bitcoin ‘s status as digital gold and lay the foundation for its role in global reserve assets.
As a weathervane, the U.S. government’s measures may also trigger an international chain reaction. Other countries may follow this model and promote the diversification of global reserve assets.
When everyone thinks that Bitcoin should become one of the asset reserves, how to reserve it seems to be irrelevant.
It has not been easy for the encryption industry to get here from small-scale geek experiments; moving mainstream amid controversy is what every BTC holder should be happy about.
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