To investors,

The crypto industry has become essential to national security. That is one of my big takeaways from the first press conference held by Crypto and AI Czar David Sacks.

Most people are focused on the strategic bitcoin reserve, which I believe will happen in 2025, but that is not the most interesting part of Sacks’ focus from my perspective. The bitcoin reserve will help the United States over the long-term. That is obviously important.

However, we have short-term issues we need to address too.

One of the big issues is demand for US treasuries. China and Japan used to be 22% of treasury demand, but they have recently fallen as low as 7% of the demand. This is important to watch because nation states and their central banks tend to be price insensitive buyers.

State Street produced a research report in 2024 that highlighted the issue:

“Growing US federal budget deficits and higher refinancing costs are bringing renewed attention to the US Treasury market. Over the next decade, an estimated US$2 trillion of net issuance is expected annually. This issuance will take place in a market environment quite different from that of the 2010s, where price-insensitive buyers, such as the US Federal Reserve (Fed) and foreign central banks, were the sources of increased demand. This landscape has shifted with the end of quantitative easing (QE) and reduced foreign reserve accumulation. By simple arithmetic, price-sensitive buyers, such as US households and corporates, are expected to account for a growing share of Treasury investors.”

Thankfully, we are watching a net new buyer of treasuries show up right when the United States needs them the most — stablecoin issuers.

Stablecoin issuers are already a top 20 holder of US treasuries collectively. This trend is accelerating in recent years, so there is a strong argument that stablecoin issuers will be a top 10 holder in short order.

Don’t take my word for it though. David Sacks said he believes stablecoins could ensure US dollar dominance globally, increase the use of US dollars as the global reserve currency, and create trillions of dollars in demand for US treasuries.

Given the potential positive impact from stablecoins, it makes sense that lawmakers are focusing their time and effort on creating stablecoin frameworks to accelerate that aspect of crypto.

This brings me to the national security component of crypto. It is essential that stablecoins continue to become popular. The demand for US treasuries depends on it.

Bitcoin is going to serve the exact role that it was created for — a perfect store of value to protect economic value over the long term.

But stablecoins are a short-term solution to a big problem on the horizon for the United States. Dare I say stablecoins are too big to fail now. The United States has to play ball, so they are taking the right steps to embrace the industry rather than fight it.

Issuing stablecoins will be a great business. Having stablecoins buy your treasuries will be a great transaction. And stablecoins will improve the financial experience for billions of people globally.

Bitcoin is for saving, stablecoins are for spending.

A digital savings account and a digital checking account. The more things change, the more they stay the same.

Hope you all have a great day. I’ll talk to everyone tomorrow.

- Anthony Pompliano

Founder & CEO, Professional Capital Management

How To Reduce Taxes When Buying or Selling Bitcoin

Chris Kline is the Co-Founder & COO of Bitcoin IRA.

In this conversation we talk about the bitcoin strategic reserve, what Trump administration could do for bitcoin, Czech central bank consider holding bitcoin as reserve asset, how many other countries are getting into the game, repeal of SB121, banks holding bitcoin, and putting bitcoin in their your retirement account.

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