The United States has initiated the creation of its first sovereign wealth fund following President Donald Trump’s executive order. This move has generated significant interest within the cryptocurrency community, with many speculating about the potential inclusion of digital assets like Bitcoin.
According to Treasury Secretary Scott Bessent, the fund is expected to be operational within the next 12 months. The announcement coincided with a surge in Bitcoin’s value, pushing it close to the $100,000 mark as investors reacted to the possibility of the cryptocurrency being part of the fund’s portfolio.
A sovereign wealth fund is a state-owned investment entity designed to manage and grow financial assets through diversified investments, including real estate, equities, and bonds. The primary objective is to generate returns that can support government expenditures.
Although the executive order did not explicitly mention digital assets, remarks from Sen. Cynthia Lummis of Wyoming fueled speculation. Her social media post referred to the development as a significant milestone, subtly hinting at Bitcoin’s potential involvement by using its recognizable symbol.
Globally, the concept of sovereign wealth funds investing in cryptocurrencies is not unprecedented. Countries such as Norway, the United Arab Emirates, and Singapore have already integrated digital assets into their investment strategies. Norway, for instance, manages one of the largest sovereign wealth funds globally, with assets totaling approximately $1.7 trillion. In 2024, the country increased its indirect Bitcoin holdings by 153%, nearing $400 million, as reported by crypto research firm K33.
The establishment of this fund follows a prior executive order focused on exploring the feasibility of a national digital asset reserve. This initiative tasked senior government officials with assessing long-term government-held cryptocurrency investments’ potential benefits and risks.
Some financial experts view a sovereign wealth fund as an optimal structure for government participation in the crypto market. An adjunct professor of finance and business economics at the University of Southern California suggested that such a fund could serve as an effective vehicle for both direct Bitcoin ownership and investments in related infrastructure.
However, the volatile nature of cryptocurrencies raises concerns about the prudence of using public funds for such investments. Bitcoin, in particular, is known for its rapid price fluctuations, which can result in significant financial gains or losses within short periods.
Additionally, critics argue that government involvement in cryptocurrency investments contradicts the foundational principles of the technology, which emphasize decentralization and financial autonomy. David Sirota, founder of investigative journalism outlet The Lever, highlighted this ideological conflict, noting the inherent tension between cryptocurrency’s libertarian roots and the concept of state-backed investments in the sector.
