Mike Novogratz: Trump Unlikely to Establish U.S. Bitcoin Reserve Amid Dollar Dominance and Political Barriers

Galaxy Digital CEO Mike Novogratz, a prominent voice in the crypto industry, shared his perspective on the possibility of a Bitcoin strategic reserve under the incoming Trump administration. In an interview with Bloomberg TV, he expressed doubts, citing the strength of the U.S. dollar and potential government resistance as obstacles.

Novogratz, founder of the crypto investment and research firm Galaxy Digital, stated he sees a “low probability” that President-Elect Donald Trump will establish a national Bitcoin reserve. He suggested that the United States government’s dominant economic position, backed by its military might, makes it unlikely that officials will embrace Bitcoin as part of a strategic reserve. “The U.S. dollar doesn’t need a second asset to maintain its global reserve currency status,” Novogratz noted, pointing to the dollar’s historical strength and trust.

Dollar Dominance and Governmental Resistance

In addition to the dollar’s strength, Novogratz emphasized potential conflicts within the U.S. government that could prevent such a move. He anticipates challenges in getting different branches of government to agree on a Bitcoin strategy, as it would require a major shift in economic policy.

Nonetheless, Novogratz noted that if a Bitcoin reserve were established in the U.S., it could cause Bitcoin’s price to soar, potentially reaching $500,000. Such a move, he argued, would likely trigger an international “BTC arms race” as other nations might follow suit to compete in the digital currency arena.

Global Bitcoin Adoption on the Rise

While the U.S. may hesitate, other nations have already embraced Bitcoin. El Salvador was the first country to make Bitcoin legal tender in 2021, a decision championed by President Nayib Bukele. Since then, Bukele has continued to increase El Salvador’s Bitcoin holdings, signaling the country’s commitment to integrating digital assets into its economy. Bhutan, a lesser-known player in the crypto space, has also made strides, quietly mining Bitcoin for years. In September 2024, crypto intelligence firm Arkham Intelligence revealed that Bhutan’s holdings in digital assets were around $780 million.

Both El Salvador and Bhutan have seen substantial gains in their Bitcoin investments as crypto markets have rallied. Bhutan’s total crypto holdings recently surpassed $1 billion, while El Salvador also reaped significant returns during the latest Bitcoin price surge.

Could the U.S. Join the Bitcoin Race?

Although Novogratz remains skeptical, a growing number of global leaders are adopting cryptocurrency in their national financial strategies. Countries like El Salvador and Bhutan are establishing footholds in the market, and these early movers have positioned themselves to benefit if Bitcoin adoption grows. Meanwhile, in the U.S., crypto advocates will continue to push for a broader role for digital assets in the country’s financial system.

For now, Novogratz believes that while a U.S. Bitcoin reserve may be unlikely under the Trump administration, the rapid growth of Bitcoin adoption abroad could eventually influence future American policy on digital assets. The debate over Bitcoin’s place in national reserves is just beginning, with the potential to reshape the global financial landscape in years to come.