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If Donald Trump\u2019s<\/span> sweeping global tariffs send household good prices soaring and drive the economy into recession, at least one industry could profit.<\/p>\n The Trump administration is considering using tariff revenues to buy Bitcoin for a \u201cStrategic Bitcoin Reserve,\u201d a top administration crypto official said in an interview last week.<\/p>\n The White House\u2019s proposal is driving interest from crypto industry figures who have made building the reserve one of their top priorities.<\/p>\n It is uniting critics on the right and left, however, who have cast the reserve as a pointless industry giveaway that will come at the expense of ordinary taxpayers. Using tariff money would add insult to injury, they say.<\/p>\n \u201cThere is nothing here but a conjunction of bad ideas,\u201d said George Selgin, an economist and professor emeritus at the University of Georgia. \u201cThe tariffs are a bad idea, the Bitcoin Strategic Reserve is a bad idea, and using the tariff revenue for the Bitcoin Strategic Reserve is a bad idea.\u201d<\/p>\n Ever since Trump proposed across-the-board tariffs on the campaign trail last year, he has touted the idea as a way to both build domestic industry and raise revenue.<\/p>\n Trump has suggested that tariff revenue could replace the nearly $5 trillion<\/a> the government hauls in income tax revenue per year, while a top trade official in his administration estimated they could raise $6 to $7 trillion over a decade.<\/p>\n Both numbers are fantasies, according to economists of all political stripes. The nonpartisan Tax Policy Center said the massive tariffs \u2014 if they all go into effect as initially proposed on \u201cLiberation Day\u201d \u2014 could raise about $3.3 trillion over that period,<\/a> assuming they don\u2019t send the economy into a tailspin.<\/p>\n The relatively meager scale of the tariffs\u2019 revenues has not stopped the Trump administration from cooking up ideas for how to spend them on everything from tax cuts for the rich to deficit reduction.<\/a><\/p>\n Last week, Bo Hines, the executive director of the Presidential Council of Advisers on Digital Assets, added another proposal to the mix. In an interview <\/a>with investor and crypto influencer Anthony Pompliano, Hines said the administration could use tariff revenue to buy bitcoin.<\/p>\n \u201cWe are looking at many creative ways, whether it be from tariffs, whether it be from something else,\u201d Hines said. \u201cEverything is on the table, and like we have said, we want as much as we can get.\u201d<\/p>\n The White House did not respond to a request for comment Friday.<\/p>\n When Trump announced that he wanted to create a \u201cstrategic reserve\u201d of bitcoin at a crypto conference last July<\/a>, it cemented his place<\/a> as the industry\u2019s favored presidential candidate.<\/p>\n Supporters have cast bitcoin as a modern-day gold with near-limitless future growth potential. Socking it away could protect against depreciation of the U.S. dollar and inflation, they say<\/a>.<\/p>\n Trump followed through on his promise almost as soon as he was in office by creating the reserve \u2014 but he disappointed some bitcoin boosters by stocking it only with tokens that had already been seized by the government. Still, Trump promised that he would search for \u201cbudget-neutral\u201d ways to buy more bitcoins.<\/p>\n Tariffs could be one way of building the store, according to Hines. But they would hardly be budget-neutral, Selgin said, since they are essentially a tax on the consumers buying imported goods.<\/p>\n The tariffs would have a disproportionate impact on low-income households, according to the Budget Lab at Yale University, which calculated they would cost an average household $3,800 per year.<\/a><\/p>\n Regardless of how they pay for it, critics say that it\u2019s inappropriate for the government to buy up an asset like bitcoin with no inherent use that is subject to wild price swings \u2014 and, in fact, has dropped in price since Trump\u2019s tariff announcement. If the government does wind up buying bitcoin, critics have warned, selling any substantial portion of it could depress the digital asset\u2019s price.<\/p>\n \u201cYou have a lot of people in the bitcoin community, bitcoin bulls who would like to see the government do a lot more, because it will benefit them,\u201d said Selgin, who also serves as a senior fellow at the libertarian Cato Institute. \u201cThese people are trying by hook or by crook to rationalize something that really is just a subsidy for them, without any benefits for other people.<\/p>\n<\/p><\/div>\nReaping Revenue?<\/h2>\n
Why Bitcoin?<\/strong><\/h2>\n