President Donald Trump signed an executive order on Thursday establishing a Strategic Bitcoin Reserve, marking a significant policy shift toward formalizing the U.S. government’s role in holding and managing Bitcoin. The order mandates a thorough audit of the federal government’s existing digital asset inventory, currently estimated at around 200,000 Bitcoin, with a market valuation close to $17.7 billion.
According to the The White House, “there is a strategic advantage to being among the first nations to create a Strategic Bitcoin Reserve.”
“The Bitcoin protocol permanently caps the total supply of bitcoin (BTC) at 21 million coins, and has never been hacked,” reads the document. “As a result of its scarcity and security, Bitcoin is often referred to as “digital gold”. Because there is a fixed supply of BTC, there is a strategic advantage to being among the first nations to create a strategic bitcoin reserve.”
White House advisor David Sacks announced the initiative on X, emphasizing the reserve will initially consist solely of Bitcoin confiscated from criminal and civil asset forfeitures, ensuring no direct cost to taxpayers. The Departments of Treasury and Commerce have been instructed to explore budget-neutral strategies for potentially expanding these holdings.
“Premature sales of bitcoin have already cost U.S. taxpayers over $17 billion in lost value. Now the federal government will have a strategy to maximize the value of its holdings,” tweeted Sacks. “The Secretaries of Treasury and Commerce are authorized to develop budget-neutral strategies for acquiring additional bitcoin, provided that those strategies have no incremental costs on American taxpayers.”
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
Trump had first introduced the concept of a Bitcoin reserve during his presidential campaign at the Bitcoin 2024 conference in Nashville.
“As the final part of my plan today, I am announcing that if I am elected, it will be the policy of my administration, the United States of America, to keep 100% of all the Bitcoin the U.S. government currently holds or acquires into the future,” he stated back then.
However, recent public statements led to confusion when Bitcoin was initially excluded from an announcement referencing other digital assets such as XRP, Solana, and Cardano. Trump later clarified via social media that Bitcoin would indeed be central components of this strategic reserve.
The announcement sparked immediate volatility in cryptocurrency markets, as Bitcoin prices plunged 5.7% within an hour. Prior speculation about the reserve had briefly driven Bitcoin prices above $92,000 earlier in the week. The market later stabilized somewhat, with Bitcoin prices recovering to approximately $88,400 at press time.
Strategic Bitcoin Reserve Spark Debate on Centralization and Regulatory Risks
Analysts suggest this policy could have broader implications, potentially influencing global governmental approaches toward cryptocurrency reserves. However, the decision has also drawn criticism from segments of the Bitcoin community, who express concerns about risks of market manipulation, increased regulatory scrutiny, and potential centralization, which could undermine Bitcoin’s decentralized ethos.
According to Matthew Pines, the executive director of the Bitcoin Policy Institute, there is a “fair concern about what an SBR means for the long-run dynamic around Bitcoin development and ossification.”
“This is a subject that needs more discussion,” he added.
Amid all the bullishness, I haven’t lost sight of @jamesob’s fair concern about what an SBR means for the long-run dynamic around Bitcoin development and ossification.
This is a subject that needs more discussion. https://t.co/nxkSw0uwcC
— Matthew Pines (@matthew_pines) March 7, 2025
Additionally, the executive order establishes a separate Digital Asset Stockpile, encompassing non-Bitcoin cryptocurrencies seized in legal proceedings. Unlike the Bitcoin reserve, this stockpile will not see further asset acquisitions beyond those already obtained through forfeitures.