On Monday, President Donald Trump signed an executive order to establish a sovereign wealth fund, fueling speculation in the crypto industry that it might be used to invest in Bitcoin and other cryptocurrencies.
"Given the current administration's well-articulated support of digital assets, it is highly likely the sovereign wealth fund announced today will include Bitcoin and possibly other U.S.-made digital assets that provide true economic utility, such as Ether," Flexa CEO Danny McCabe told TheStreet Crypto. "Inclusion of digital assets like these would not only provide increased stability to the U.S. economy, but would be a giant leap forward in making America the leader in the digital asset sector."
Others point out that the sovereign wealth fund could offer the Trump administration a less onerous path to gain exposure to cryptocurrency. “Trump [may be] setting up alternatives like this sovereign wealth fund to acquire Bitcoin without the bureaucracy,” Austin King, co-founder of Omni Network, told TheStreet Crypto.
Sovereign wealth funds, which collectively hold more than $13 trillion of assets under management, have long been used by wealthy nations like Norway, Kuwait, Saudi Arabia, and Qatar to reinvest surplus funds, advance strategic priorities, diversify a nation’s assets, and ensure long-term economic stability.
“Given Trump's crypto focus, it's possible that this fund could be used to purchase Bitcoin and other cryptocurrencies that were deemed important for turning America into a crypto powerhouse,” King told TheStreet Crypto.
Trump’s sovereign wealth fund may take up to 12 months to establish, and several pro-crypto Cabinet members appear to be involved in the effort, including Treasury Secretary Scott Bessent and Trump’s U.S. Commerce Secretary nominee Howard Lutnick.
“President Trump has been hinting at this for the last several months,” Ishmael Green, a crypto attorney at international law firm Diaz Reus, told TheStreet Crypto. “President Trump controls in the neighborhood of half-a-billion dollars of cryptocurrencies – including Bitcoin and several hundred million dollars’ worth of Ethereum alone – [guaranteeing that] the action is all but assured.”
Despite optimism, some experts highlight the risks of including crypto in a sovereign wealth fund. “Crypto’s volatility and unclear regulations make it a tough sell for a government-backed investment,” Mauricio Mondragon, Head of Product at crypto custodian Fortress Trust, told TheStreet Crypto.
“If it did happen, the biggest challenges would be figuring out how to store and manage the assets securely, avoiding political influence, and making sure it fits within existing regulations,” Mondragon told TheStreet Crypto. “It’s an interesting idea, but there are a lot of hurdles to clear first.”
If the U.S. moves forward with the plan, it would join other nations already engaging in the practice.
Norway, home to the world's largest sovereign wealth fund, already holds exposure to $355 million in Bitcoin. It also directly invests in American crypto exchange Coinbase, public Bitcoin miner Marathon Digital, and software firm MicroStrategy, which markets itself as a “Bitcoin treasury company.”
"Sovereign wealth funds [could] act as an accelerant on the crypto fire,” wrote David Shrier, former non-executive director at Copper, a crypto infrastructure provider for institutional clients.
"These funds deliver three levels of impact on crypto,” he wrote. “First, they provide direct investment and price support to a given crypto. Second, their investment acts as implied endorsement that encourages other institutional and retail investors to participate in this new asset class. And third, if the particular country releases its own central bank digital currency (CBDC), sovereign money could induce market movement into that CBDC and away from non-aligned cryptocurrencies like Bitcoin."
The world’s largest asset manager, BlackRock, also spoke recently about sovereign wealth fund purchases of Bitcoin and their potential to drive the asset’s price up to $700,000.
"If everyone adopted that conversation, it would be $500,000, $600,000, $700,000 per Bitcoin," BlackRock CEO Larry Fink told Bloomberg last month.
Among voices in the crypto industry, there’s a growing belief that a sovereign wealth fund could also help solidify the U.S.'s leadership in the space: "The U.S. has the opportunity to become the world’s leading crypto hub, and a sovereign wealth fund could legitimize crypto as an asset class in the U.S. while supporting broader adoption," Spencer Farrar, partner at Theory Ventures, told TheStreet Crypto.
"While privatization has driven significant cost reductions for new technologies, government-backed efforts are critical for national morale and security," Farrar added. "It’s still unclear how the fund will be structured, but strategic investments in assets like TikTok, crypto, and AI align with long-term economic and security goals... I expect continued government support and direct intervention in AI and crypto, despite budgeting challenges."
