President Donald Trump signed an executive order today establishing a “Strategic Bitcoin Reserve” and a “Digital Asset Stockpile.” The initiative will initially use cryptocurrency seized in government criminal cases. White House AI and crypto czar David Sacks announced the move on X, calling it a “digital Fort Knox” for Bitcoin.
“The Reserve will hold Bitcoin forfeited in criminal or civil proceedings,” Sacks clarified. On March 6, the White House fact sheet confirmed a separate “Digital Asset Stockpile” for non-Bitcoin cryptocurrencies.
Government Seizes Crypto to Fund Reserve
The Treasury Department will transfer Bitcoin seized from criminal cases to the reserve. Other federal agencies must evaluate their authority to contribute holdings. Additionally, the Treasury and Commerce secretaries will devise “budget-neutral strategies” to acquire more Bitcoin without taxpayer costs.
However, Sacks emphasised the U.S. will not sell any Bitcoin in the reserve. “It will remain a store of value,” he stated. Notably, the government holds 198,109 BTC ($17.87 billion) and $119 million in Ether, per Arkham Intelligence.
Bitcoin Price Tumbles 6% Post-Announcement
Bitcoin plummeted 6% within hours of the announcement, dropping from $90,400 to $84,979. Analysts attributed the decline to unmet market expectations. Traders had hoped for aggressive government Bitcoin purchases, but Sacks confirmed the reserve would only use existing holdings.
Meanwhile, Ether fell 4%, XRP slid 7%, Solana dropped 5.14%, and Cardano plunged 9.19%. “No funding plan beyond current holdings was provided,” noted trading resource The Kobeissi Letter.
Industry Reacts With Mixed Sentiment
Despite the sell-off, some experts praised the long-term implications. Electric Capital CEO Avichal questioned the market’s reaction: “Who sells on news of a U.S. Bitcoin Reserve?!”
Satoshi Action Fund CEO Dennis Porter argued the market misjudged the move. “The reserve will acquire more Bitcoin,” he insisted. Pseudonymous trader Ash Crypto predicted global adoption: “Every country will follow BTC to $250K+.”
Stockpile Limits Disappoint Altcoin Investors
Trump’s March 3 Truth Social post claimed the reserve would include XRP, Solana, and Cardano. However, Sacks clarified the Digital Asset Stockpile will only hold forfeited crypto and no new purchases. The U.S. currently owns no XRP, SOL, or ADA.
In response, Cardano founder Charles Hoskinson criticised the omission. “This ignores innovative blockchains,” he tweeted. Meanwhile, the White House stressed “responsible stewardship” of assets under Treasury oversight.
Audit of U.S. Crypto Holdings Ordered
Trump’s executive order mandates a full audit of federal crypto holdings. Agencies must report details to the Treasury Secretary and a presidential crypto working group. Sacks highlighted inconsistencies: “There’s never been a complete audit.”
Furthermore, the order builds on a January directive studying a national crypto stockpile. Analysts speculate the audit could reveal additional undisclosed reserves.
What’s Next for the Bitcoin Reserve?
The Treasury now faces pressure to outline acquisition strategies. While initial funding relies on seizures, budget-neutral approaches like swapping assets could expand reserves. However, skeptics argue limited buying power may curb Bitcoin’s upside.
Meanwhile, Trump’s embrace of crypto contrasts with past administrations. “This legitimises Bitcoin as a strategic asset,” said CoinShares CEO Jean-Marie Mognetti. Despite today’s dip, proponents believe the reserve signals long-term institutional adoption.
Written By Fazal Ul Vahab C H
