Market News

US Leverages Bitcoin for Federal Sovereign Wealth Fund Creation Amid Trade Tensions

Billionaire Chamath Palihapitiya has suggested that the US government could utilize its Bitcoin holdings to establish a federal sovereign wealth fund. President Donald Trump signed an executive order tasking the Treasury and Commerce Departments with creating this fund to bolster economic stability and growth. Palihapitiya proposes that the government could initially fund this project by liquidating some holdings, such as a portion of its stake in TikTok, and by leveraging its Bitcoin reserves. The US holds approximately 198,109 BTC, valued at about $19.408 billion, which could be used as collateral rather than sold outright. Additional funds could be sourced from revenues generated through land deals and the sale of real estate from abandoned buildings. Palihapitiya recommends investing these funds in a diverse portfolio including index funds, bonds, and venture capital, with a strategic approach to minimize exposure to riskier assets. Sovereign wealth funds, which are commonly funded by excess revenues from natural resources in other nations, have not been previously utilized by the US federal government. Meanwhile, trade tensions between the US and China have escalated, impacting Bitcoin's market stability as it struggles to maintain the $100,000 price level. This ongoing financial climate highlights the delicate balance between geopolitical strategies and financial market dynamics.