President Donald Trump recently signed an executive order, directing the U.S. Treasury and Commerce Departments to create a sovereign wealth fund (SWF). The announcement was made on Monday in the Oval Office, where Trump emphasized the potential of this new initiative.
Here’s everything you should know.
Trump appointed Treasury Secretary Scott Bessent and Commerce Secretary nominee Howard Lutnick to lead the effort to establish the fund.
“We’re going to stand this thing up within the next 12 months. We’re going to monetize the asset side of the U.S. balance sheet for the American people,” Treasury Secretary Scott Bessent told reporters. “There’ll be a combination of liquid assets, assets that we have in this country as we work to bring them out for the American people.”
The creation of this fund positions the U.S. alongside countries like Norway and Saudi Arabia, which have successfully used sovereign wealth funds for global investment. This move is seen as a way to boost the U.S.’s economic influence both within the country and internationally.
However, questions remain about how the fund will be financed, managed, and what its investment priorities will be, especially given the nation’s large national debt.
Trump also mentioned that the new sovereign wealth fund could be used for acquisitions, including buying TikTok. The app, which has around 170 million users in the U.S., was temporarily taken offline after a law required its Chinese owner, ByteDance, to sell or face a ban. Trump had delayed the law’s enforcement with an executive order that pushed its deadline to January 19.
Trump stated that discussions with potential buyers are ongoing, and a decision about TikTok’s future could come in February.
A Sovereign Wealth Fund (SWF) is a state-owned investment fund that holds assets like stocks, bonds, real estate, and other financial instruments. Governments create these funds to meet specific economic goals, often using revenues from budget surpluses, foreign currency operations, privatizations, or resources like oil.
Although Bitcoin and other digital assets were not specifically mentioned in the executive order, the establishment of this sovereign wealth fund raises the possibility of the U.S. government investing in cryptocurrencies, including Bitcoin.
If that happens, it could mark a major shift in the government’s involvement in the crypto space.
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