In February 2025, the Trump administration signed an executive order to establish a national sovereign wealth fund (SWF). While the specific operations remain undisclosed, the market widely perceives the goal to be strategic investments aimed at consolidating the United States’ dominance in the digital asset space. Unlike resource-based sovereign funds in countries like Norway and Saudi Arabia, the core strategy of the U.S. SWF may be to incorporate Bitcoin into the national balance sheet to combat the global debt crisis and currency devaluation.
Debt-Driven Economic Transformation: With U.S. federal debt surpassing $40 trillion and traditional monetary policies proving ineffective, entrepreneur Jeff Booth highlights that the past two decades have seen global debt of $185 trillion resulting in only $46 trillion in GDP growth. Bitcoin’s fixed supply has emerged as the “ultimate tool” to address systemic risks.
Reserve Asset Arms Race: Senator Cynthia Lummis has proposed allocating 5% of foreign exchange reserves to Bitcoin, and Salvadoran presidential advisor Max Keiser predicts that if the U.S. follows suit, Bitcoin’s price could soar to $2.2 million.
Strategic Reserve Feasibility: The U.S. government currently holds around 200,000 seized Bitcoins (from darknet cases), which could serve as the SWF’s initial reserves. Coupled with institutional holdings from entities like MicroStrategy, this could create a “nation-corporate” defensive moat.
Institutional Capital’s “Triple-Nested” Structure: The Resonance of ETFs, Sovereign Funds, and Miner Hoarding
Traditional bull market analyses often focus on retail and hedge funds, but the core driving force in this cycle has shifted toward a more complex institutional layering:
ETF Absorption Effect: As of February 2025, the total size of the U.S. spot Bitcoin ETF market has surpassed $113 billion, with BlackRock’s single product accounting for over 40%. Bernstein predicts that by 2025, inflows could reach $60 billion, far exceeding the $126 billion in gold ETFs.
Miner Hoarding Strategy: North American-listed mining companies hold over 62,000 Bitcoins. Combined with the halving event that reduced block rewards to 3.125 BTC (resulting in an annual inflation rate of less than 1%), miners are holding back their coins, intensifying the market’s scarcity.
Potential Sovereign Fund Entry: Abu Dhabi’s Mubadala Investment Company has already allocated Bitcoin ETFs, and if the U.S. SWF follows suit, it could prompt traditional sovereign capital, such as the $1.8 trillion Norwegian Government Pension Fund, to follow.
Policy Leverage: From Regulatory Easing to the “Digital Cold War” Geopolitical Struggle
The Trump administration’s crypto policy is not an isolated event but rather a reflection of the broader restructuring of the global financial order:
Regulatory Paradigm Shift: With the repeal of SAB 121, banks like JPMorgan and Citigroup can now offer cryptocurrency custody services, bridging the gap between traditional finance and on-chain assets.
Geopolitical Tool: If the U.S. establishes a Bitcoin reserve, it would directly challenge the gold reserve strategies of countries like China and Russia. Michael Saylor suggests that the U.S. government should liquidate part of its gold reserves to acquire Bitcoin and strengthen the dollar’s global dominance.
State-Level Legislative Experiments: Utah has allowed its state fund to allocate up to 10% of its assets to digital assets, while Arizona has proposed the establishment of a strategic Bitcoin reserve fund. Legislation from 23 states serves as a “testing ground” for federal policy.
Market Structure Transformation: From “Retail FOMO” to “Institutional Price-Setting Power Struggle”
Current market volatility is much lower than the 2021 cycle, but the scale of capital has grown exponentially, signaling a fundamental shift in capital structure:
Institutional Price Leadership: MicroStrategy now holds 552,000 Bitcoins (representing 2.8% of total circulating supply), with CEO Michael Saylor publicly stating that the company will continue to buy indefinitely using corporate cash flow, effectively adopting a central-bank-like strategy of accumulating Bitcoin.
Derivative Market Restructuring: CME Bitcoin futures open interest has surpassed $32 billion, while implied volatility for options has decreased to 35% (down from 120% in 2021), signaling that institutions are using derivatives to hedge and reduce systemic risk.
Liquidity Layering Phenomenon: The correlation between Bitcoin and altcoins has dropped below 0.4, with capital heavily concentrated in BTC, highlighting its evolution from a speculative asset to “digital gold.”
Risks and Critical Points: The “Double-Edged Sword” Effect of Sovereign Capital
While the bullish market logic appears robust, several structural risks need careful attention:
Uncertainty of Policy Implementation: The SWF’s establishment is still in the planning stages, and if the funding comes from tariffs (around $80 billion per year), the actual amount allocated to Bitcoin could be limited.
Liquidity Trap: Should the Federal Reserve raise interest rates again due to inflationary pressure, Bitcoin could experience a pullback alongside traditional risk assets. Standard Chartered warns that a global M2 liquidity contraction might suppress price growth in the second half of 2025.
Regulatory Arbitrage Risk: Should the U.S. SWF become overly involved, it could provoke retaliatory measures from other nations, such as the EU accelerating the launch of the digital euro or China strengthening the cross-border use of the digital yuan, potentially forming an anti-Bitcoin alliance.
Conclusion: Beyond the Cycle Narrative, Reconstructing the Asset Valuation Framework
This current bull market is not just a quantitative shift in supply and demand but a qualitative transformation in which sovereign capital is redefining the value of money. Bitcoin’s ultimate narrative has evolved from “an inflation hedge” to “a tool of national strategic competitiveness.” If the U.S. SWF successfully integrates Bitcoin into its reserves, the world may witness a “Bretton Woods 3.0” moment in global financial history—this time, the anchor asset will no longer be gold, but the absolute scarcity constructed through code.