Rumors are circulating that Donald Trump's pick for Treasury Secretary in his upcoming administration, Scott Bessent, plans to divest his Bitcoin ETFs to avoid potential conflicts of interest in his new role.
Scott Bessent: Trump's Treasury Secretary Pick to Sell Bitcoin ETFs
Scott Bessent, a billionaire hedge fund manager, holds a diverse portfolio that includes Bitcoin ETFs.
Bessent was a partner at Soros Fund Management, where he became the head of the London office, and is the founder of Key Square Group.
Founded in 2015 alongside Michael Germino, Key Square Group focuses on macro investments using geopolitics and economics. The firm manages over $5 billion in assets under management (AUM) and has posted substantial gains from 2021 to 2023.
Bessent also served as a professor of economic history at Yale from 2006 to 2011.
In late November 2024, Donald Trump announced his intention to appoint Bessent as the next U.S. Treasury Secretary in his new administration, set to begin on January 20.
Bessent and Bitcoin
Bessent is known for his enthusiasm for cryptocurrency markets.
It's no surprise that his portfolio includes Bitcoin ETFs.
In a recent interview, he openly expressed excitement about Trump's embrace of cryptocurrency. According to Bessent, cryptocurrencies align closely with freedom and are here to stay. He described Bitcoin as one of the most exciting innovations and highlighted the role of cryptocurrencies in attracting younger generations to financial markets.
While his support for crypto is strong, as Treasury Secretary, he will also need to address the many frauds plaguing the crypto markets. However, he has specifically differentiated Bitcoin from other cryptocurrencies, as reflected in his ETF holdings focused solely on BTC.
The Liquidation of Bitcoin ETFs Under the Trump Administration
The New York Times reported the potential liquidation of Bessent's Bitcoin ETFs.
The main concern is the possible conflict of interest posed by the new Treasury Secretary's portfolio holdings.
Bessent reportedly plans to divest various assets with potential conflicts of interest, including his Bitcoin ETF holdings. While Bessent's total investments exceed $700 million, his Bitcoin ETF holdings represent only a small portion, valued between $250,000 and $500,000.
The amounts to be liquidated are too minor to impact the markets or investor sentiment significantly.
Impact on Bitcoin Prices
This development is unlikely to have a significant effect on BTC prices.
A broader concern is the economic policies of Trump and Bessent, particularly regarding the U.S. dollar.
Bessent has stated that the Trump administration will likely aim to maintain a strong U.S. dollar. Historically, Bitcoin's medium- to long-term price trends are inversely correlated with the strength of the U.S. dollar, specifically the Dollar Index.
Currently, the Dollar Index is at its highest in recent years. However, some analysts predict it could weaken slightly in the short term.
Moreover, some experts suggest Trump may initially favor a weaker dollar to counterbalance the export challenges caused by rising tariffs. When the U.S. increases import tariffs, affected exporting countries often retaliate with similar measures.
It’s possible that the dollar could weaken during the early phase of the Trump administration, followed by a strengthening trend later.
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News source: Gue 22 🌐 🚀