Dark Money Scheme to Use Tax Dollars to Invest in Bitcoin – The Lever
A group advocating for Bitcoin is urging President-elect Donald Trump to amass large quantities of cryptocurrency, and similar efforts at the state level are in progress. However, it has come to light that this group is spearheaded by right-wing individuals connected to the fossil fuel industry, determined to dismantle environmental regulations. The proposed Project 2025 seeks to disband the Environmental Protection Agency and is linked to the same people pushing for Bitcoin stockpiling.
The implications of such actions are disturbing, as they would involve governments utilizing taxpayer money and pension funds to purchase and hold billions of dollars worth of mostly unregulated and volatile assets. This move could potentially increase energy demands and hasten climate change impacts. Furthermore, by accumulating Bitcoin, governments would inadvertently validate and create more significant demand for this currency, ultimately driving up its value and leaving taxpayers to cover the expenses. Currently, a mere 2 percent of accounts hold over 90 percent of the total circulating Bitcoin, highlighting a disproportionate distribution of wealth within the cryptocurrency realm.
Proponents of the Bitcoin reserve concept argue that if the federal government adopts this strategy, the value of one Bitcoin could soar to over $1 million, representing a massive increase from the current valuation. According to various policy suggestions influenced by cryptocurrency interests, establishing a Bitcoin reserve could assist in reducing the federal deficit and position the U.S. as a pioneer in financial innovation while reinforcing the dominance of the dollar system on a global scale. These plans are being promoted by advocacy groups like the Bitcoin Policy Institute and the Satoshi Action Fund, an anonymous nonprofit dedicated to promoting crypto legislation.
Additionally, at least four states have introduced Bitcoin-reserve proposals which closely mirror the Satoshi Action Fund’s template legislation. A review of the group’s financial records and the work history of its executives reveals strong ties to the Koch Network, a conglomerate of oil and petrochemical companies, as well as the Heritage Foundation, the architect of the Project 2025 blueprint. The Heritage Foundation’s blueprint includes recommendations on how to dismantle the Environmental Protection Agency, a task previously handled by an individual currently working at the Satoshi Action Fund.
The intensifying efforts to establish Bitcoin reserves coincide with a significant financial push by the cryptocurrency industry during the last election cycle towards securing crypto-friendly lawmakers. Many members of Congress are advocates for crypto and the new administration has started appointing industry allies to key regulatory positions. Despite these developments, experts caution against the creation of Bitcoin reserves, warning of their potential financial risk to taxpayer-funded institutions. Instead of a physical reserve, Bitcoin assets are secured through digital means, relying on energy-intensive processes that strain public infrastructure and utilities.
The mounting energy consumption and environmental impact of Bitcoin mining are concerning, with projections suggesting a continued rise in energy usage associated with cryptocurrencies. Regulators have expressed apprehensions about the industry’s lack of oversight, citing the potential for market instability and widespread financial instability. Amid these concerns, the Satoshi Action Fund has been at the forefront of advocating for a federal strategic Bitcoin reserve, with alleged involvement in drafting an executive order for Trump to establish such a reserve. The government has already seized significant amounts of Bitcoin through legal proceedings, raising questions about the implications of accumulating cryptocurrency at a national level. Senator Cynthia Lummis has proposed a bill requiring the federal government to acquire a substantial portion of the Bitcoin supply over a specific timeframe, further emphasizing the push towards Bitcoin reserves in the U.S.
