President Donald Trump signed an executive order establishing the Strategic Bitcoin Reserve of the United States. The reserve will initially be capitalised with approximately 200,000 BTC – equivalent to $18 billion – already in the possession of the federal government, confiscated as part of criminal and civil proceedings.
The measure stipulates that no bitcoins will be sold and that the assets will be maintained as a store of value, similar to a ‘digital Fort Knox’, according to White House cryptocurrency chief David Sacks. In addition, Trump instructed Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick to develop strategies to acquire additional BTC without impacting the federal budget.
The executive order also includes the creation of a US digital asset reserve, which will contain cryptocurrencies other than Bitcoin. However, the government will not actively purchase new assets for this reserve, merely storing the seized ones.
In recent days, the debate over this decision has been heated. At first, Trump spoke of a ‘strategic crypto reserve’ that would include XRP, SOL, ADA, BTC and ETH. However, Sacks clarified that this was simply a reference to the top five cryptocurrencies by market capitalisation, downplaying the relevance of the statement.
But how to finance this reserve without affecting the balance sheet? Geoff Kendrick, head of digital asset research at Standard Chartered, suggested that the government could sell part of its $760 billion gold reserves to finance the purchase of additional BTC. Other hypotheses include the use of the $39 billion Exchange Stabilization Fund or the passage of the Bitcoin Act 2024, proposed by Senator Cynthia Lummis, which provides for the purchase of 200,000 BTCs per year for five years. However, Kendrick emphasised that none of these strategies are likely to be implemented immediately, leaving Treasury Secretary Bessent to outline a clear direction.
The impact of this decision on the crypto market could be significant. Conor Grogan, an executive at Coinbase, pointed out that the move could remove $18 billion of selling pressure from the market, since, until now, the US government was required by law to sell confiscated BTCs. Now, however, these assets will remain locked in reserve, potentially reducing the pressure on the sell side.
Data from Arkham Intelligence reveals that in addition to 200,000 BTC, the US government also holds 122 million USDT and 56,035 ETH (equivalent to $121 million), as well as other confiscated cryptocurrencies.
This move marks a turning point for the institutional adoption of Bitcoin. While it represents a clear recognition of the strategic value of cryptocurrencies, it also raises questions about how the US will manage this new reserve. A bullish signal for the market or a political game? The future of the Bitcoin Reserve will be decisive in understanding this.
