• Federal Reserve confirms no involvement in Bitcoin holdings, reaffirming Congressional authority over cryptocurrency-related national strategies.
• Trump administration explores Executive Order options for a Bitcoin Strategic Reserve using Treasury-managed Exchange Stabilization Fund.

Jerome Powell, Chair of the Federal Reserve, clarified during a press briefing that the institution will not engage in any plans to establish a Bitcoin Strategic Reserve (BSR). He emphasized that such actions fall under the purview of Congress, and the Federal Reserve does not intend to advocate for changes to existing legislation to enable Bitcoin holdings. 

This statement caused an immediate reaction in the cryptocurrency market, with Bitcoin’s price retreating from recent highs and the probability of a BSR dropping from 40% to 34%, as reported by Polymarket.

The discussion surrounding the Federal Reserve’s role highlights the boundaries of its authority. While the institution plays a key role in monetary policy and economic stability, it lacks the legislative power to independently implement a BSR. Congress, as the primary legislative body, holds the authority to enact financial strategies such as incorporating Bitcoin into national reserves.

Should the Trump administration pursue a rapid establishment of a BSR, an executive order could direct the U.S. Treasury to utilize the Exchange Stabilization Fund (ESF) for Bitcoin acquisitions. The ESF operates independently of Congress, granting the Treasury flexibility to stabilize markets or address financial risks. 

For a long-term framework, a legislative route offers greater stability. Proposals like the “U.S. Bitcoin Strategic Reserve Act,” currently under review by the Senate Banking Committee, aim to formalize Bitcoin as part of the country’s strategic assets. This path, while more robust, requires approvals from both legislative chambers and the President, presenting potential delays and challenges.

Another potential strategy involves the Federal Reserve incorporating Bitcoin into its balance sheet through open market operations. However, Powell’s recent statements indicate that such actions are improbable at this stage. Alternatively, the Treasury could create a dedicated fund for Bitcoin investments, contingent on Congressional consent.

While the Federal Reserve’s position signals caution, it does not eliminate the possibility of a BSR. Ongoing legislative efforts and executive actions will continue to shape the evolving narrative of Bitcoin’s role within the U.S. financial strategy.

The current price of Bitcoin (BTC) is approximately $98,338, reflecting a daily increase of 3.79%. Despite recent market volatility, Bitcoin has shown significant strength, achieving a 132.64% year-to-date gain and a notable 61.64% increase over the past six months.

Key Technical Levels:

• Resistance: Bitcoin is facing resistance around the $100,000 psychological level. A breakout above this could push the price toward the next major target of $108,000, its recent all-time high.
• Support: Immediate support lies near $95,000, with a more critical level at $92,000. If these levels break, Bitcoin could test $88,000.

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