Chamath Palihapitiya’s Crypto Strategy: USA to Use Bitcoin for Its Wealth Fund?

President Donald Trump Donald Trump Donald Trump is an American former president politician, businessman, and media personality, who served as the 45th president of the U.S. between 2017 to 2021. Trump earned a Bachelor of science in economics from the University of Pennsylvania in 1968. Trump won the 2016 presidential election as the Republican Party nominee against Democratic Party nominee Hillary Clinton while losing the popular vote. As president, Trump ordered a travel ban on citizens from several Muslim-majority countries, diverted military funding toward building a wall on the U.S.–Mexico border, and implemented a family separation policy. Trump has remained a prominent figure in the Republican Party and is considered a likely candidate for the 2024 presidential election President has ordered the creation of a U.S. sovereign wealth fund within a year. The Treasury and Commerce Departments have 90 days to present a plan on how to fund and manage it. However, since the U.S. runs on a deficit, Congress must approve the proposal before it can move forward.

But what if the government could fund it without borrowing money?

Chamath Palihapitiya’s Bitcoin Strategy

Billionaire investor Chamath Palihapitiya has suggested an alternative approach – using the U.S. government’s Bitcoin holdings to help fund the project.

The U.S. holds about 198,109 BTC, worth roughly $19.4 billion. Palihapitiya believes that instead of taking on more debt, the government could use these Bitcoin reserves while also gradually selling off other assets, such as its 50% stake in TikTok.

He estimates that by managing these assets carefully, the government could raise between $50 billion and $100 billion in the next two to three years—without borrowing.

A Diversified Investment Approach

Palihapitiya also recommends a balanced investment strategy to ensure long-term stability. He suggests that the fund should include:

• Index funds
• Bonds
• Hedge funds
• Private equity

He advises that venture capital should make up less than 10% of the portfolio, ensuring steady returns while keeping risks low.

Moreover, he recommends that the sovereign wealth fund be diversified across index funds, bonds, hedge funds, and private equity, with venture capital making up less than 10% of the portfolio. This idea is to ensure that the money rotates rightfully and gives long-term returns while minimizing risk.

Other Countries Are Already Doing This

According to a Bloomberg report, Treasury Secretary Scott Bessent confirmed that the funding process has begun and should take about 12 months. If successful, this sovereign wealth fund could provide long-term economic stability for the U.S.

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While Alaska has run its own sovereign wealth fund for years, the federal government has never created one. Meanwhile, other countries have already incorporated Bitcoin into their financial strategies:

• Norway’s sovereign wealth fund has invested in crypto businesses.
• The UK government holds about 61,200 BTC.

These investments help hedge against inflation and reduce risk, as Bitcoin does not move in sync with traditional assets like stocks and bonds. If the U.S. follows a similar path, it could mark a major shift in how governments manage digital assets.

With other nations already integrating Bitcoin into their financial strategies, the U.S. may have to decide – lead the way or play catch-up?