President Donald Trump signed an executive order on Monday to create the first-ever U.S. sovereign wealth fund, sparking excitement among crypto bulls who see this as an opportunity for the government to invest in digital assets.
After the announcement, in which Treasury Secretary Scott Bessent said the new fund would be established within the next 12 months, Bitcoin rallied to nearly $100,000, boosted by speculation that the currency may be among the assets included in the fund.
A sovereign wealth fund is a government-owned and operated investment vehicle used to invest in a diverse array of assets including real estate, stocks, and bonds. Its intended purpose is to make a profit and use that money for government spending.
While the president didn’t specifically indicate that digital assets would be included in the fund, Sen. Cynthia Lummis (R-Wyo.) triggered excitement by calling the announcement a “₿ig deal” in a post on X, using the Bitcoin “₿” symbol to suggest that the original cryptocurrency could somehow be involved.
The idea of a government using this type of fund to invest in digital assets is not as far-fetched as it may seem. A number of other countries have already allocated a portion of their sovereign wealth funds to Bitcoin or other cryptocurrencies to invest in the burgeoning asset class.
Norway operates one of the world’s largest sovereign wealth funds, managing around $1.7 trillion, according to Global SWF, a consulting firm that specializes in these kinds of investments. In 2024, the country increased its indirect Bitcoin allocation by 153% to just shy of $400 million, as reported by crypto research firm K33.
Other countries that have invested funds in digital assets include the United Arab Emirates and Singapore.
The announcement of a sovereign wealth fund follows a crypto-specific executive order signed last month that tasks a group of high-ranking government officials with evaluating the potential for a national reserve for digital assets, which would similarly involve using government funds to buy crypto to hold over a long period of time.
Some argue that a sovereign wealth fund is a better way for the government to invest in crypto. “I believe a United States sovereign wealth fund is the perfect vehicle for bitcoin ownership outright and investment in bitcoin infrastructure,” Nik Bhatia, an adjunct professor of finance and business economics at the University of Southern California, wrote on X.
However, government-funded crypto investments could prove to be an extremely risky way to use taxpayer money because of the volatile nature of assets like Bitcoin, which have been known to lose or gain thousands of dollars within just a few hours.
Furthermore, David Sirota, founder of investigative journalism outlet The Lever, pointed out that any type of government investment in crypto is antithetical to the technology’s original libertarian ethos.
“There’s a tension between ‘crypto is the way we free fiat money from government!’ and ‘government must now be forced to invest in muh crypto,’” he wrote on X.