Donald Trump’s proposal for a $90 billion U.S. Bitcoin reserve sparks debate among financial experts. Advocates like Anthony Pompliano call it a vital step to counter the growing crypto influence of nations like Bhutan and El Salvador, while critics question its feasibility and impact.

Bhutan and El Salvador Lead the Bitcoin Reserve Trend

Considering that other nations, like Bhutan and El Salvador, have already accepted Bitcoin into their national reserves, Anthony Pompliano, founder and CEO of Professional Capital Management, stressed the strategic need of establishing a US Bitcoin Reserve, Coingape reports.

Although Bhutan is not a big global economy at the moment, its aggressive stance toward Bitcoin can easily transform it into one in the future, according to Pompliano, who underlined the necessity for immediate action within the US. Just recently, Bhutan's Bitcoin holdings surpassed $1 billion.

The market analyst went on to say that El Salvador might follow suit, becoming a worldwide economy due to its exposure to Bitcoin. When asked to elaborate on why the Bitcoin reserve was necessary, Pompliano stated:

A $90 Billion Plan for Financial Sovereignty

“This asset (Bitcoin) is so asymmetric. If it continues to compound, it will translate into billions of dollars on their balance sheets while the US struggles with a growing national debt.”

In a statement he gave before the election at a Bitcoin conference in July, Donald Trump said that the US would keep all of its Bitcoins so that a US Bitcoin Reserve could be made for the "good of all Americans."

Despite the fact that the outcome is still up in the air, the concept developed into what cryptocurrency aficionados now call a strategic US Bitcoin reserve; some, like Senator Cynthia Lummis, have even suggested selling gold in order to buy up to 1 million Bitcoins. With a Bitcoin reserve of this size, the United States would dominate the Bitcoin economy, with a value of almost $90 billion at today's market values.

Bitcoin’s Role as “Digital Gold”

The idea of a Strategic US Bitcoin Reserve is to have a government-held asset that can help the economy weather financial storms.

The decentralized and scarce nature of Bitcoin might make a BTC reserve a useful tool in the fight against inflation, currency depreciation, and worldwide economic instability. Donald Trump's stance is in line with the rising tide of governments embracing Bitcoin as a "digital gold" and its popularity among nations aiming for financial independence.

While Bitcoin's market cap is hovering around $1.7 trillion at the moment, gold's is at $17 trillion, according to Pompliano, who continued by drawing a comparison between the two. Because of its superiority as a digital store of wealth, he predicted that Bitcoin's market capitalization would surpass that of gold.

Government Adoption Could Trigger a Bitcoin Boom

The digital product always outshines its analog equivalent, according to Pompliano. He argued that protecting money from inflation and currency devaluation is a worldwide concern that Bitcoin's primary use case—storing value—solves. According to him, Bitcoin offers a deflationary, capped alternative to fiat currencies that nations and individuals may choose from, while central banks are always devaluing them.

Pompliano elaborated on how that could be a knock-on effect of Trump's plan to create a US Bitcoin reserve.

If the federal government is willing to invest in Bitcoin, then all levels of government should follow suit. “You’re sitting with cash that’s guaranteed to lose value. If you want to fulfill your fiduciary duty, sitting in 100% cash is the wrong answer,” he claimed.

Skepticism and Bold Predictions for Bitcoin’s Future

Claiming that massive institutional investment in Bitcoin shielded investors against inflation, he referenced MicroStrategy's performance under Michael Saylor's leadership, which included the acquisition of 27,200 BTC. In addition, Pompliano demanded that governments worldwide "get off zero" and think about allocating at least one percent of their budget to Bitcoin.

Despite the proposal by President-elect Donald Trump, billionaire Galaxy Digital CEO Michael Novogratz expressed doubt about the idea of strategically adopting a US Bitcoin reserve. He was very clear that the Bitcoin reserve has little chance of happening under Trump.

The possible strategic benefit of such a step, though, was something he did admit. “It would be very smart for the United States to take the Bitcoin they have and maybe add some to it,” he proposed. “That would signal to the world that we are a technology-first country, a crypto, digital asset-first country. I don’t necessarily think that the dollar needs anything to back it up, but it would make a statement.”

Bitcoin Hits Record $90,291 Amid Reserve Speculation

According to Novogratz, a huge price increase for Bitcoin would be in store if a US Bitcoin reserve were to be established. "If we get the BTC reserve, as a guy who owns a lot of Bitcoin, I won’t cry," he joked. “I think Bitcoin heads to $500,000. It’s a different paradigm because it forces every other country in.”

As it stands, Bitcoin is trading at a record high of $90,291. If this plan were to pass, the cryptocurrency's value would skyrocket, bringing it even closer to the limelight of the global financial markets.