Donald J. Pump pt. 2 - Promises made, promises kept.

Friday January 24th, 2025 - Issue # 94

(Any views expressed below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.)

We dodged a bullet. Literally. We literally dodged a bullet. Imagine if we were staring at Kamala and Tim Walz running the show right now. Trudeau would still be relevant, Bitcoin would be stuck at $30-40k, and I’d probably be writing this from a much darker place. Oh man.

Okay, people, I am now firmly in the camp of those who believe we’re living in a simulation. I’m a full convert. Or maybe, just maybe, this is what it feels like to be standing at the beginning of some sort of Golden Era. Either way, it’s hard not to feel like the last few days have been straight out of a movie.

Trump’s team launched a memecoin last Friday night, and within days it became one of the most valuable crypto tokens in existence. I watched it unfold while playing poker, and at first, I thought it was a scam. When it shot up from $3 to $10, I realized this was real. Somehow, I was fully paying attention to it, didn’t make any money, and actually lost money at the poker table. Classic. But the real shock came later: Trump’s team used the profits from the token to buy Solana, and now there’s talk of including American-made cryptocurrencies like Solana and XRP in the U.S. Treasury alongside Bitcoin.

It’s not just talk, either. Half of Trump’s cabinet was at the Crypto Ball in Washington, including Treasury Secretary Scott Bessent, who has been an advocate for integrating digital assets into the U.S. financial system.

Here’s Crypto Czar David Sacks (you might know him from the All In Podcast as the smarter, pragmatic, grown up at the table), letting the room know that the beginning of innovation for crypto in America has just begun.

Ugh, I had the invite and chose not to go to this. Definitely had severe fomo last weekend.

After all of this, we really need to start thinking about the Strategic Bitcoin Reserve possibilities. If you’ve been following along, I’ve written about this before. Senator Cynthia Lummis proposed a bill that would see the U.S. Treasury buy 1 million BTC over five years and hold it for at least 20 years. Back then, I said this was the most bullish but least likely scenario. Now? I mean, how can you possibly rule it out.

Yesterday morning, Lummis tickled us (crypto-twitter) into what was probably the most volatile social media day I’ve seen in crypto over the last 8 years.

This had everyone on the edge of their seat waiting for an announcement of a Strategic Bitcoin Reserve. 10am EST hit and crickets. Folks were scrambling trying to figure out which time zone Wyoming was — all the while Bitcoin was jumping all over the place and our desk was rocking with folks trading around the news.

What a tease you silly Cynthia, you.

In all seriousness, it was a bit of a let down at that moment. The bitcoin price was a living breathing thing. You could literally feel the market’s emotion in the price. This was a serious announcement — With Senator Cynthia Lummis appointed as Chair of the Senate Banking Subcommittee on Digital Assets, and Trump leaning hard into digital assets, the idea of a Strategic Bitcoin Reserve is no longer far-fetched. If the U.S. moves forward with her version of a SBR, it would create a persistent 200,000 BTC per year bid on Bitcoin. It wouldn’t just reprice Bitcoin overnight; it would trigger a global response. Other nation-states would scramble to follow suit, recognizing this as the moment Bitcoin crosses the chasm to become the most important nation-state reserve asset.

And it’s not just nation-states. Tech giants like Apple, Microsoft, and Amazon, which have all at least considered Bitcoin as a balance sheet asset, would have a clear green light. Combine that with new FASB accounting rules that make holding Bitcoin far easier for corporations, and you’re looking at a corporate buying spree unlike anything we’ve ever seen. Bitcoin would go from being a curiosity to a cornerstone of corporate and sovereign balance sheets.

This brings us to the repeal of SAB 121, which might be even more bullish than an SBR. Until now, U.S. banks were essentially barred from offering crypto custody thanks to SAB 121’s controversial rules. Those rules treated crypto as a liability on bank balance sheets, creating a structural roadblock for integration. With SAB 121 gone, the doors have been flung open for banks to custody crypto, which changes everything.

Think about it: banks being able to custody crypto means you’ll eventually be able to borrow against your holdings. What would real estate prices be if mortgages didn’t exist and you had to pay in cash? That’s where we’ve been with Bitcoin—an asset with no leverage. Now imagine the flood of liquidity and market depth that comes with crypto-collateralized loans. Retail investors will be able to access the same tools that institutional players have enjoyed, and the implications for Bitcoin’s price floor are enormous. Imagine no longer having to sell your Bitcoin…you’re probably not thinking big enough here.

This isn’t just a win for Bitcoin; it’s a win for the entire ecosystem. With banks offering custody and loans, corporations now able to hold Bitcoin without fear of accounting headaches, and a more favorable regulatory environment opening the door to new financial products, we’re seeing the foundations of a completely new financial paradigm.

So, which is more bullish—the Strategic Bitcoin Reserve or the repeal of SAB 121? Honestly, it’s a toss-up. An SBR creates demand from the U.S. government and other nation states that will feel the pressure to stockpile. The repeal of SAB 121 creates demand from everyone. It democratizes access and ensures Bitcoin is no longer sidelined but fully integrated into the global financial system.

We’re standing at the crossroads of two monumental shifts: the possibility of a Strategic Bitcoin Reserve and the integration of Bitcoin into traditional banking. One is a massive government signal; the other is a structural change that impacts every single market participant. Both are incredibly bullish, and both point to 2025 being a year for the history books.

Strange bedfellows…

Promises made, promises kept…welcome home, Ross.

Have a wonderful weekend!