Key Points
- Trump signed an order to create a strategic bitcoin reserve using forfeited government bitcoin, with no plans to sell.
- The initiative will eventually include ether, XRP, Solana, and Cardano. The order directs Treasury and Commerce to develop budget-neutral acquisition strategies.
- The policy has sparked mixed reactions, with some critics calling it merely a rebranding of existing holdings.
- Conflict-of-interest concerns persist due to Trump’s family ventures and stake in a crypto platform.
U.S. President Donald Trump signed an executive order on Thursday to establish a strategic bitcoin reserve, setting the stage for a broader initiative to support the cryptocurrency industry. The reserve, which will be capitalized using bitcoin acquired by the federal government through asset forfeiture in criminal and civil proceedings, is intended to serve as a digital store of value, akin to a “digital Fort Knox.” This announcement came just a day before Trump met with cryptocurrency industry executives at a White House summit.
According to billionaire David Sacks, the administration’s crypto czar, the government will not sell any bitcoin deposited into the reserve; instead, it will hold the asset to maximize its long-term value. Sacks also indicated that the reserve would eventually include four other digital assets- ether, XRP, Solana, and Cardano—announced earlier this week—which helped push their market values higher.
The executive order instructs the Treasury and Commerce departments to develop budget-neutral strategies for acquiring additional bitcoin without imposing extra costs on taxpayers. In addition to the Bitcoin reserve, the order outlines the creation of a “U.S. Digital Asset Stockpile” for other tokens. However, further acquisitions will be limited to assets obtained via forfeiture proceedings.
The new policy has sparked mixed reactions. Following Sacks’ social media announcement on X, bitcoin’s price tumbled more than 5% to below $85,000 before recovering to around $88,109. Some investors and crypto industry insiders expressed disappointment, with Charles Edwards of Capriole Investments dismissing the move as merely rebranding existing government holdings—a “pig in lipstick.” Critics argue that the measure is a giveaway to an already affluent community. At the same time, supporters contend that holding a strategic reserve could allow taxpayers to benefit from any future appreciation in cryptocurrency values.
The decision is also mired in conflict-of-interest concerns, as Trump’s family has ventured into cryptocurrency with meme coins, and he holds a stake in World Liberty Financial, a crypto platform. Despite these controversies, the Trump administration appears committed to bolstering the U.S. position in the competitive global crypto market.
