Federal Reserve Signals Major Shift — Explores Using Gold Reserve Gains to Fund Bitcoin Holdings

TradingKey – On August 7, the Federal Reserve released a research note exploring the possibility of using valuation gains from U.S. gold reserves to fund a Strategic Bitcoin Reserve, marking a dramatic shift in its stance toward digital assets.

Just eight months ago, Fed Chair Jerome Powell reiterated that the Federal Reserve was prohibited from holding Bitcoin under the Federal Reserve Act, stating that any change would require Congressional approval. 

Now, the Fed is considering a workaround: using revaluation gains from gold reserves — not taxpayer funds — to finance BTC accumulation.This proposal, if implemented, could provide a powerful new tailwind for Bitcoin (BTC), reinforcing its role as a sovereign-grade store of value.

Using gold reserves to buy Bitcoin has two benefits. First, it aligns with former President Trump's promise not to use taxpayer money. This reduces obstacles for the Bitcoin reserve plan. Second, the U.S. has the largest gold reserves in the world, totaling 8,133.46 tons. The returns from this are substantial.

Recently, both Bitcoin (BTC) and gold (XAUUSD) have been fluctuating at high prices. As of now, Bitcoin is priced at $114,000 and gold at $3,372 per ounce.

Gold price chart, source: TradingKey