Trump orders creation of US Sovereign Wealth Fund, it could buy Bitcoin and TikTok

February 3, 2025 – U.S. President Donald Trump has signed an executive order directing the establishment of a U.S. sovereign wealth fund.

The order mandates that the fund be created within the next 12 months and leaves open the possibility that it could be used to acquire the Chinese-owned short-video app TikTok.

The announcement comes amid ongoing speculation regarding the future of TikTok, which has 170 million American users.

Trump has previously stated that he is in discussions with multiple parties regarding the platform’s ownership and expects a decision on its fate later this month.

The executive order instructs the Treasury and Commerce Departments to submit a comprehensive plan within 90 days, outlining potential funding mechanisms, investment strategies, governance models, and structural details for the sovereign wealth fund.

However, the text of the order provides little clarity on how the fund would be financed. On the other hand, the U.S. government still has budget deficit and has a lot of debt to GDP.

Historically, sovereign wealth funds are financed through budget surpluses or revenues from natural resources.

However, Trump has suggested tariffs as a possible source of funding, though this approach remains unconfirmed by administration officials.

Establishing such a fund may also require congressional approval, adding a layer of complexity to its implementation.

One potential pathway for the fund's creation is repurposing the U.S. International Development Finance Corporation (DFC), which currently works with private investors to fund development projects globally.

The Trump administration has considered transitioning the DFC into a sovereign wealth fund model in recent months.

In a related development, Trump announced his nomination of Benjamin Black to lead the DFC.

Black, a managing partner at Fortinbras Enterprises, is the son of Leon Black, co-founder of asset management giant Apollo Global Management.

Following the executive order, Wyoming Senator Cynthia Lummis posted on X, hinting that the new fund could have invested in Bitcoin (BTC).

While Trump, Treasury Secretary Scott Bessent, and Commerce Secretary Howard Lutnick did not directly confirm any crypto-related investments, Lummis suggested that Bitcoin could be among the asset classes considered for the fund.

The idea of a U.S. sovereign wealth fund investing in Bitcoin aligns with growing institutional interest in the cryptocurrency, but whether such a move would be part of the administration’s strategy remains to be seen.

If successfully established, the U.S. sovereign wealth fund would join more than 90 similar funds worldwide, which collectively manage over $8 trillion in assets.

Many of the largest sovereign funds are based in the Middle East and Asia, where they leverage government capital to make strategic investments in industries ranging from technology to infrastructure.

Further details are expected once the Treasury and Commerce Departments submit their plans in the coming months.