US President Donald Trump has signed an executive order to create a Strategic Bitcoin Reserve. This means that instead of selling Bitcoin ($BTC) seized in criminal and civil cases, the US government will now hold onto it as a long-term asset.
The decision is part of a broader plan to strengthen the country’s position in digital assets. However, the move has sparked mixed reactions. Supporters believe this could help legitimise Bitcoin worldwide and push other countries to build their own reserves.
Critics, on the other hand, argue that no new Bitcoin is being bought, making the initiative just a rebranding of the government’s existing holdings.
The executive order instructs the US Department of Treasury to fund the Strategic Bitcoin Reserve using Bitcoin that has already been seized through criminal and civil forfeitures. This means the government will not buy new Bitcoin but will instead keep the coins it has already confiscated.
A statement from the White House described Bitcoin as “digital gold”, highlighting its scarcity and fixed supply of 21 million coins. The US government currently holds around 198,109 $BTC, which is worth approximately $17.5 billion at current market prices.
Despite this large amount, there has never been a full audit of the US government’s Bitcoin holdings. The new order requires an audit to determine exactly how much Bitcoin is in government possession.
The White House AI and Crypto Czar, David Sacks, argued that the US has made huge losses by selling seized Bitcoin in the past.
He pointed out that the government had sold 195,000 $BTC over the last 10 years for a total of $366 million. If those Bitcoin had been held instead, they would now be worth $17 billion.
“Premature Bitcoin sales have already cost US taxpayers billions. Now, the federal government will have a strategy to maximise the value of its holdings”, Sacks wrote on social media.
The executive order also instructs the Secretaries of Treasury and Commerce to look for ways to acquire more Bitcoin in a budget-neutral way. This means no extra cost to taxpayers—though no details have been given on how this would be done.
However, not everyone is convinced that the move will have a real impact. Many experts say that since the government isn’t actually buying new Bitcoin, this is more of a symbolic move than a major shift in policy.
The founder of WhaleWire, Jacob King, dismissed the initiative as a “rebranding of a long-standing program”. He argued that since no new Bitcoin is being purchased, the overall supply-and-demand balance of Bitcoin remains unchanged.
A well-known critic of Bitcoin, Peter Schiff, went even further. He called the order “bogus”, saying it is just a way for the government to act like it supports Bitcoin without actually making any meaningful changes. He also pointed out that the government can only hold Bitcoin it seizes and cannot buy more, since purchases require government spending.
The market reacted negatively to the news. Many Bitcoin investors had hoped that the US government would start buying Bitcoin, which would increase demand and push prices higher. When it became clear that the reserve would only consist of already-seized Bitcoin, the price of Bitcoin dropped.
Financial analysts at The Kobeissi Letter described the reaction as a “sell-the-news event”, meaning that investors had high expectations that were not met.
Despite the price drop, some experts believe the market overreacted. Crypto analyst BitQuant stated, “Bitcoin always overreacts to news, both up and down. I can’t recall a time when Bitcoin was more bullish, yet people are still being manipulated into panic-selling”.
Could this be a step toward Bitcoin legitimisation?
While many are sceptical about the reserve, others believe it is an important step toward recognising Bitcoin as a legitimate global asset. Some experts think the move will influence other countries to establish their own Bitcoin reserves, making Bitcoin a more widely accepted part of the global financial system.
The Head of Research at Bitwise, Ryan Rasmussen, argued that this order could encourage financial institutions, wealth managers, and pension funds to start holding Bitcoin. He said, “This is likely to push other nations to acquire Bitcoin, especially as it removes concerns about the US government selling off its holdings”.
The Chief Investment Officer at Bitwise, Matt Hougan, agreed. He pointed out that the order reduces the risk of a future Bitcoin ban, as it shows that the government is willing to treat Bitcoin as a legitimate reserve asset.
Crypto analyst, Nic Carter, also praised the decision, calling it a “successful fulfillment of a key campaign promise”. He argued that the move marks the first time the US government has officially recognised Bitcoin as a strategic asset.
The White House Crypto Summit and future plans
The executive order was signed just one day before the White House Crypto Summit, a key event where discussions on digital assets and regulations were expected.
Along with the Strategic Bitcoin Reserve, the order also creates a US Digital Asset Stockpile. This stockpile will hold other confiscated digital assets, such as cryptocurrencies like Ethereum, Solana, and XRP.
However, there is a key difference: Bitcoin in the reserve will be held permanently, while other digital assets in the stockpile may be sold based on recommendations from the Treasury Department.
Sacks provided further details about the plan in a social media post, writing, “The Reserve will be capitalised with Bitcoin owned by the federal government that was forfeited as part of criminal or civil asset forfeiture proceedings. This means it will not cost taxpayers a dime”.
He also estimated that the US government holds around 200,000 $BTC, though he admitted that no full audit has ever been conducted.
The decision to create a Bitcoin reserve comes at a time when Bitcoin prices have been experiencing major fluctuations. After reaching an all-time high of $109,000, Bitcoin saw a 14% drop following Trump’s announcement.
At the time of press, the top coin was trading just below $90,000, down by over 2% in the last 24 hours.
