TLDR
President Trump signed an executive order establishing a Strategic Bitcoin Reserve and Digital Asset Stockpile using seized crypto assets
The reserve will be capitalized with already-seized Bitcoin from criminal and civil forfeitures, with no immediate plans to purchase additional Bitcoin
Bitcoin prices fell 5% to around $85,000 following the announcement as markets reacted to the lack of new purchasing
Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick will develop “budget-neutral” strategies to potentially expand holdings
The government estimates it owns approximately 200,000 Bitcoin and has mandated a full audit of its digital asset holdings
President Donald Trump signed an executive order on March 6 establishing a Strategic Bitcoin Reserve and a Digital Asset Stockpile. The move represents a major shift in U.S. digital asset policy.
The order directs the federal government to retain Bitcoin and other cryptocurrencies that have been seized through criminal and civil asset forfeiture proceedings. These assets will be held as a long-term store of value rather than being sold off.
Under the plan, the Treasury Department will oversee the management of both reserves. The Bitcoin Reserve will focus exclusively on Bitcoin, while the Digital Asset Stockpile will contain other cryptocurrencies obtained through forfeiture.
The market reacted negatively to the announcement. Bitcoin fell more than 5% within minutes to a low of $85,000 before recovering slightly to trade around $86,000 to $88,000.
The drop appears linked to disappointment that the government will not immediately purchase additional Bitcoin for the reserve. Many investors had expected a more aggressive buying strategy based on Trump’s previous statements about crypto.
Market Disappointment
White House Crypto and AI Czar David Sacks confirmed the reserve will be funded exclusively with already-seized Bitcoin. This approach ensures that taxpayers bear no financial burden for establishing the reserve.
According to Sacks, the U.S. government controls approximately 200,000 Bitcoin. No full audit has ever been conducted, but Trump’s order mandates a comprehensive accounting of federal digital asset holdings.
Just a few minutes ago, President Trump signed an Executive Order to establish a Strategic Bitcoin Reserve.
The Reserve will be capitalized with Bitcoin owned by the federal government that was forfeited as part of criminal or civil asset forfeiture proceedings. This means it…
— David Sacks (@davidsacks47) March 7, 2025
The order also prohibits the sale of Bitcoin from the reserve. This positions it as a permanent store of value similar to gold reserves held at Fort Knox.
Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick have been tasked with developing “budget-neutral strategies” for acquiring additional Bitcoin. These strategies must have no “incremental costs” on taxpayers.
However, the order does not provide specific details or a timeline for when these holdings might be expanded. This lack of clarity contributed to the market’s lukewarm response.
The move comes just before a White House crypto summit scheduled for March 7. Industry executives are expected to meet with the president to discuss cryptocurrency policy.
Earlier in the week, Trump had mentioned that the strategic reserve might include several cryptocurrencies. He specifically named Bitcoin, Ether, XRP, Solana, and Cardano.
This suggestion drew criticism from some Bitcoin supporters. Tyler Winklevoss, a Bitcoin billionaire, stated: “I have nothing against XRP, SOL, or ADA but I do not think they are suitable for a Strategic Reserve.”
Sacks has previously noted that the U.S. lost over $17 billion in potential value by selling seized Bitcoin prematurely. The new policy aims to prevent such missed opportunities in the future.
Some analysts warn that maintaining a Bitcoin reserve without active management could expose the government to market volatility. Others are concerned about potential conflicts of interest.
Trump’s family has launched cryptocurrency “meme coins,” and the president holds a stake in World Liberty Financial, a crypto platform. His aides have stated that Trump has handed over control of his business ventures.
Crypto investor Charles Edwards expressed disappointment with the announcement. He wrote: “No active buying means this is just a fancy title for Bitcoin holdings that already existed with the Government. This is a pig in lipstick.”
Despite the mixed reception, supporters of the move argue it shows the administration’s commitment to positioning the U.S. as a global leader in digital assets. They see it as a step toward making the country the “crypto capital of the world.”
The executive order marks a clear shift in federal digital asset policy. It suggests the administration sees long-term value in cryptocurrencies, even as questions remain about implementation.
