Selling Bitcoin Could Cut Budget Deficit

Renowned Bitcoin critic and economist Peter Schiff has stirred fresh controversy by urging President Joe Biden to sell all Bitcoin currently held by the US government.

Schiff, a longtime detractor of cryptocurrency, tweeted that liquidating these assets would help reduce the 2024 budget deficit. He says it would also eliminate any speculation about establishing a US “Strategic Bitcoin Reserve.”

Peter Schiff Wants Strategic Bitcoin Reserve Plans Quashed

Barely a day after calling Bitcoin the public enemy number one, Peter Schiff, the gold proponent, has taken another jab at the pioneer crypto.

“The one good thing Biden can do before leaving office is sell all the Bitcoin currently held by the US Govt. Not only would the money raised reduce the 2024 budget deficit, but it would put an end to all the nonsense about creating a harmful ‘Strategic’ Bitcoin Reserve,” Schiff stated.

Schiff’s remarks were met with immediate pushback from cryptocurrency advocates. A popular user on X (formerly Twitter), identified as BitBuyer313, countered.

“Then we’d just have to buy in at a higher price. Trump already let the cat out of the bag; now our competitors are working out plans for their own strategic Bitcoin reserves. Game theory already won this, Peter. Gold’s market cap doesn’t stand a chance against Bitcoin,” the user challenged.

Schiff responded by asserting that former President Donald Trump never pledged to buy Bitcoin. Instead, he committed only to retain what the government currently holds. Schiff also argued that Biden selling these reserves now would prevent Trump from having to fulfill such a promise should he return to office.

In hindsight, during his campaign, Trump announced plans to create a “strategic national Bitcoin stockpile,” using BTC seized by the government.

“It will be the policy of my administration to keep 100% of all the Bitcoin the US government currently holds or acquires into the future. This will serve as the core of the strategic national Bitcoin stockpile,” Trump said.

Schiff criticized Trump’s announcement, calling it a tactical error. He argued that Trump should have kept such intentions private until taking office to prevent the current administration from acting first.

Elsewhere, the US government’s Bitcoin holdings have been a topic of intrigue. Recent blockchain analysis revealed movements of billions in Bitcoin, including $2.43 billion linked to Mt. Gox after Bitcoin crossed $100,000 in price.

Adding to the speculation, finance lawyer Scott Johnsson recently suggested that the US Marshal Service (USMS) might already be selling Bitcoin seized in high-profile cases, such as those involving the Silk Road. A June servicing agreement between the USMS and Coinbase has bolstered theories about such sales.

Global Trends in Strategic BTC Reserves

While Schiff continues to campaign against the idea of a Bitcoin reserve, other nations are considering adopting it. As BeInCrypto reported, Russia is already deliberating on creating a strategic Bitcoin reserve as part of its de-dollarization efforts.

Vancouver’s mayor has proposed a municipal Bitcoin reserve to shield the city from financial instability. Similarly, Poland’s political leader, Sławomir Mentzen, has promised to establish a national Bitcoin reserve if elected.

These developments reflect a growing acknowledgment of Bitcoin’s role in global finance. Advocates argue that Bitcoin reserves could provide financial independence and protection against inflation, a concern particularly relevant for economies reliant on the US dollar.

The debate over the US government’s Bitcoin holdings is a microcosm of a larger ideological divide. While Schiff champions traditional fiscal policies and gold, proponents of Bitcoin see it as an essential asset for the digital age.

As Trump’s inauguration approaches, the fate of US government-held Bitcoin will likely become a contentious issue, reflecting broader debates about cryptocurrency’s role in national strategy.