Donald Trump has signed an executive order creating a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile. This marks a historic shift in the federal government’s approach to Bitcoin and other digital assets.
The reserve will hold Bitcoin seized in criminal or civil asset forfeiture cases, with no plans to sell. White House AI and Crypto Czar David Sacks called it a “digital Fort Knox”, emphasizing Bitcoin’s role as a store of value. Meanwhile, the Digital Asset Stockpile will contain altcoins like Ethereum, Solana, and XRP, but the government will not actively purchase any new digital assets.
This move aims to maximize the value of U.S. holdings while avoiding taxpayer costs. However, it raises questions about how the government might increase its BTC stockpile in the future.
Bitcoin Price Slides After Announcement
Bitcoin dropped about 6%, falling from $90,400 to $84,979, according to CoinMarketCap data. The Kobeissi Letter, a well-known trading resource, pointed out that the price decline was due to the lack of clarity on how the reserve would be funded, aside from Bitcoin already held by the U.S. government. Market participants had hoped for a plan to actively accumulate more Bitcoin, but the executive order did not provide that.
Altcoins also suffered losses. Ether, XRP, Solana, and Cardano fell after David Sacks confirmed that the U.S. Digital Asset Stockpile would only include seized assets from criminal or civil proceedings and would not be expanded through new purchases.
“The government will not acquire additional assets for the Stockpile beyond those obtained through forfeiture proceedings,” Sacks stated.
In the first hour after the announcement:
- Ether dropped 4%
- XRP fell 7%
- Solana declined 5.14%
- Cardano plunged 9.19%
The reaction highlights the market’s disappointment over the lack of a buying strategy, despite the significance of Trump’s move to establish a Strategic Bitcoin Reserve.
Where Did U.S. Bitcoin Come From?
The U.S. government is now the largest nation-state holder of Bitcoin. Most of its 198,109 BTC, worth about $17.87 billion, comes from criminal seizures. Here’s a breakdown of how the government amassed this stockpile:
- 69,370 BTC (Silk Road, 2020) – The government seized this stash from an unidentified hacker tied to the infamous dark web marketplace.
- 94,636 BTC (Bitfinex Hack, 2022) – U.S. authorities recovered stolen funds from Ilya Lichtenstein and Heather Morgan.
- 51,351 BTC (Silk Road Hacker, 2022) – James Zhong forfeited this Bitcoin after a federal investigation.
While some of these holdings could be returned to victims, most are now considered part of the U.S. strategic reserve.
Will the U.S. Buy More BTC?
While the Strategic Bitcoin Reserve will initially be funded with forfeited BTC, the White House stated that the Commerce and Treasury Secretaries would explore ways to acquire more Bitcoin without imposing costs on U.S. taxpayers.
The establishment of the Bitcoin reserve also means that no BTC within it will be sold—a stark contrast to previous U.S. policies. David Sacks, White House AI and Crypto Czar, criticized past administrations for prematurely selling Bitcoin, arguing that these rushed liquidations cost taxpayers over $17 billion in lost value. He emphasized that the new strategy ensures Bitcoin is treated as a long-term store of value, rather than being dumped on the market without a clear vision.
Trump’s executive order does not allocate funds to purchase additional BTC, but it does instruct the Treasury and Commerce Secretaries to find budget-neutral ways to acquire more BTC. Possible strategies include:
- Utilizing the $39 billion Exchange Stabilization Fund to buy Bitcoin.
- Passing the BITCOIN Act, introduced by Senator Cynthia Lummis, which calls for the U.S. Treasury to acquire 1,000,000 BTC over five years.
While there’s no confirmation on new purchases, crypto advocates are pushing for policies that would allow the government to expand its Bitcoin holdings without using taxpayer money. Sacks believes this approach will prevent future losses and ensure that the U.S. capitalizes on Bitcoin’s long-term value, rather than repeating past mistakes of premature liquidations.
Over the past decade, the federal government sold approximately 195,000 bitcoin for proceeds of $366 million. If the government had held the bitcoin, it would be worth over $17 billion today. That’s how much it has cost American taxpayers not to have a long-term strategy.
— David Sacks (@davidsacks47) March 6, 2025
A Bold Step Toward Bitcoin’s Future
Despite initial market turmoil, Trump’s executive order solidifies Bitcoin’s role in U.S. financial strategy. The decision to hold rather than sell Bitcoin prevents further losses from premature sell-offs, which cost taxpayers billions in the past.
Industry leaders see this as a crucial step toward mass adoption. Some expect that other nations will follow the U.S. model, leading to increased global government participation in BTC reserves.
For now, investors are watching closely. Will the U.S. government expand its Bitcoin stockpile? That remains the billion-dollar question.