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02/06 14:11

Chamath Palihapitiya’s Crypto Strategy: Will the U

Chamath Palihapitiya’s Crypto Strategy: Will the US Use Bitcoin as Its Wealth Fund?

Story Highlights

The US is considering creating a sovereign wealth fund, but needs to determine funding and management.   

One proposal suggests using the US government’s Bitcoin assets to launch the fund, which could generate $50-100 billion.

This approach, similar to strategies used by Norway and the UK, could diversify risk and hedge against inflation.

President Donald Trump’s Message

Has ordered the creation of a US sovereign wealth fund within a year. The Treasury and Commerce departments have 90 days to come up with a plan on how to fund and manage it. However, due to the US deficit, Congress must approve the proposal before it can move forward.

But what if the government could fund it without borrowing money?

 Chamath Palihapitiya’s Bitcoin Strategy

Billionaire investor Chamath Palihapitiya has proposed an alternative approach – using the US government’s Bitcoin assets to fund the project.

The US holds about 198,109 BTC, worth about $19.4 billion.  Palihapitiya believes that the government could use these Bitcoin reserves while gradually selling other assets, such as its 50% stake in TikTok, instead of taking on more debt.

I think if we don’t want to sell BTC, we can start by slowly selling our 50% stake in TokTok + borrowing against our BTC holdings. We can then add funds through any revenue from land/drilling deals and any RE sales of all abandoned buildings.

He estimates that by carefully managing these assets, the government can raise $50 billion to $100 billion in the next two to three years - without borrowing.

Diversifying your investment approach

Palihapitiya also recommends a balanced investment strategy to ensure long-term stability. He suggests that the fund should include:

Index funds

Bonds

Hedge funds

Private equity

He recommends that venture capital should account for less than 10% of the portfolio, ensuring stable returns while keeping risk low.

 In addition, he suggested that the sovereign wealth fund be diversified between index funds, bonds, hedge funds and private equity, with venture capital accounting for less than 10% of the portfolio. The idea is to ensure that funds flow rationally and bring long-term returns while minimizing risks.

Other countries have already done this

According to Bloomberg, Treasury Secretary Scott Bessent confirmed that the fundraising process has begun and will take about 12 months. If successful, this sovereign wealth fund could provide long-term economic stability for the United States.

While Alaska has operated its own sovereign wealth fund for years, the federal government has never created such a fund. Meanwhile, other countries have already incorporated Bitcoin into their financial strategies:

Norway's sovereign wealth fund has invested in cryptocurrency businesses.

The British government holds about 61,200 Bitcoins.

These investments help hedge against inflation and reduce risks because Bitcoin does not keep pace with traditional assets such as stocks and bonds. If the United States follows a similar path, it could mark a major shift in the way governments manage digital assets. 

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