Geoff Kendrick, head of digital assets research at Standard Chartered, has proposed a budget-neutral approach to financing the newly established U.S. Strategic Bitcoin Reserve (SBR) by selling a portion of the country’s gold holdings to acquire Bitcoin.
Underlining that the US government currently holds approximately $760 billion worth of gold, Kendrick said, “The next question is what could constitute budget-independent strategies, and theoretically, one could do the following: sell gold and buy Bitcoin.”
This development comes after President Donald Trump’s recent executive order marked a historic shift in the federal government’s approach to digital assets by officially establishing the Strategic Bitcoin Reserve and Digital Asset Stockpile. Under the order, all future Bitcoin purchases for the reserve must comply with budget-neutral financing strategies that do not impose additional burdens on American taxpayers.
The directive also calls for all Bitcoin currently held by the US government to be transferred to the Strategic Bitcoin Reserve, with the strict condition that none of it be sold.
Beyond selling gold, Kendrick outlined additional strategies to fund the SBR without increasing government spending. One potential avenue is tapping into the Exchange Stabilization Fund (ESF), which has $39 billion in net assets. Repurposing the ESF, traditionally used to stabilize financial markets, for Bitcoin purchases would be “a clear change of direction,” Kendrick said.
Another possibility is to integrate the Bitcoin Act of 2024, introduced by Senator Cynthia Lummis, into the funding framework. The legislation aims to allocate 200,000 BTC per year for five years. Kendrick believes that if structured correctly, the bill could be implemented in a budget-neutral manner.
While President Trump is expected to detail the Strategic Bitcoin Reserve at the White House Digital Assets Summit today, Kendrick warned that immediate policy implementation is unlikely. Kendrick pointed to Treasury Secretary Scott Bessent’s role in formulating and executing a comprehensive acquisition strategy. “I don’t really see any of those three solutions being presented today,” Kendrick said. “Rather, given the prominence given to Bessent in the executive order, they would all require Treasury Secretary Bessent to propose something.”
Kendrick also suggested that U.S. states and institutional investors, including pension funds, could follow the federal government's lead in allocating to Bitcoin.
Kendrick also noted that the establishment of the Strategic Bitcoin Reserve could prompt other sovereign countries to adopt similar strategies. “I’ve written before about how the US strategic reserve, whatever it looks like, could embolden other countries,” Kendrick said. He cited Abu Dhabi’s recent purchase of a 4,700 BTC-equivalent stake in BlackRock’s iShares Bitcoin Trust (IBIT) as an example of the growing sovereign interest in Bitcoin. “Other states will certainly join in on the purchase,” he added.
*This is not investment advice.
