by Ram ben Ze'ev

President Trump has floated the idea of establishing a U.S. reserve backed by Bitcoin. On the surface, this might appear to be a forward-thinking, innovative move in line with the digital revolution. However, upon closer examination, such a proposal is fraught with danger, imprudence, and economic recklessness. Taxpayer funds should never be exposed to a highly volatile and speculative asset with no intrinsic value. If the goal is to create a sound and stable reserve, the focus should be on a time-tested asset—gold—not a digital token that has historically been more of a speculative instrument than a store of value.
Bitcoin’s History of Wild Volatility
One of the fundamental reasons why Bitcoin is an unsuitable choice for a U.S. reserve is its extreme price fluctuations. Over the last 30 days alone, Bitcoin’s price has swung dramatically between a high of $109,358.01 and a low of $89,212.12. That represents a staggering $20,000 price swing in less than a month. Over the past decade, such volatility has repeated itself numerous times.
Consider these historical examples:
2017 Boom and Bust: Bitcoin soared to nearly $20,000 in December 2017, only to crash to below $4,000 by early 2019—a loss of 80%.
2021 Rollercoaster: Bitcoin hit an all-time high of $64,000 in April 2021, then collapsed to $30,000 by July, wiping out over half its value in just a few months.
2022 Crypto Winter: Bitcoin started the year at around $47,000 but plunged to nearly $15,000 by November 2022, largely due to the collapse of major cryptocurrency exchanges and regulatory pressures.
No serious custodian of public money should expose a nation's financial stability to such erratic price swings. Unlike traditional fiat currencies, Bitcoin is not backed by any tangible asset, nor is it supported by the economic output of any nation. Its value is dictated purely by market sentiment and speculation.
No Intrinsic Value, No Credible Backing
Historically, reserve assets like gold and government-backed currencies have had intrinsic value or sovereign backing. Gold, for example, has been used for thousands of years as a store of value due to its scarcity, durability, and industrial uses. Bitcoin, by contrast, exists only as digital code.
Its value is determined solely by what people are willing to pay for it at any given moment. This lack of fundamental backing makes Bitcoin inherently unreliable. Even traditional fiat currencies—while not backed by physical commodities—derive their value from the economic power and creditworthiness of the issuing country. Bitcoin, with no governing entity or physical application outside of speculation, lacks any such foundation.
Artificially Propping Up Bitcoin?
The real question that needs to be asked is: Why is the Trump administration considering this move? Is this about establishing a legitimate national reserve, or is there an underlying attempt to artificially support Bitcoin's value? If the U.S. government were to allocate taxpayer dollars into Bitcoin, it would be injecting public money into a speculative market, effectively propping up the digital asset’s price.
Would this serve the interests of American taxpayers, or would it merely enrich early adopters and current institutional players who hold large amounts of Bitcoin? The government should not be in the business of influencing speculative markets or artificially inflating asset prices.
A Simple Mathematical Reality: Bitcoin Cannot Replace the U.S. Dollar
Some Bitcoin enthusiasts argue that Bitcoin could eventually replace fiat currencies as the global standard. This argument falls apart when considering simple mathematics.
The total supply of Bitcoin is capped at 21 million coins. However, an estimated 3 to 4 million coins have been permanently lost due to forgotten passwords, discarded hard drives, and other mishaps, meaning the effective supply is closer to 17–18 million coins.
Now, let’s consider the U.S. economy:
The U.S. GDP in 2024 is approximately $27 trillion.
The average annual income in the U.S. is around $60,000 per person.
The U.S. dollar money supply (M2) is currently over $20 trillion.
If Bitcoin were to serve as a true replacement for the U.S. dollar, each Bitcoin would need to be worth well into the millions of dollars per coin to support even the U.S. economy—let alone global transactions. Such a scenario is mathematically untenable.
Gold: The Logical and Proven Alternative
If President Trump and his administration truly believe in the need for a national reserve, why not return to gold? Unlike Bitcoin, gold has been a store of value for millennia. It has real-world applications in technology, medicine, and jewelry. Governments and central banks around the world continue to hold gold in their reserves because it has a proven track record of stability, liquidity, and universal acceptance.
Re-establishing a gold-backed reserve, for the United States, would provide far greater security and reliability than Bitcoin ever could. Gold is immune to sudden collapses driven by market speculation, regulatory crackdowns, or exchange failures—issues that plague Bitcoin.
A Reckless Gamble with Public Money
The idea of using taxpayer money to build a Bitcoin reserve is not just misguided; it is dangerous. A responsible government should not gamble with public funds in speculative markets, especially not one as unpredictable as cryptocurrency.
If President Trump wants to bolster America's financial stability and strengthen the value of U.S. reserves, gold is the clear and rational choice. Bitcoin, on the other hand, remains an asset of speculation, not stability.
American taxpayers deserve better stewardship of their money. Allocating billions to a digital asset that can lose half its value in months is economic malpractice. This proposal must be rejected outright in favor of real, tangible, and historically proven reserves.
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Bill White (Ram ben Ze'ev) is CEO of WireNews Limited, Mayside Partners Limited, MEADHANAN Agency, Kestrel Assets Limited, SpudsToGo Limited and Executive Director of Hebrew Synagogue