TLDR
- President Trump’s executive order creates a Strategic Bitcoin Reserve using crypto seized through criminal and civil forfeitures
- No plans to purchase additional Bitcoin immediately, leading to a 5% market drop to around $85,000
- The government estimates it currently holds about 200,000 Bitcoin and has ordered a complete audit
- The reserve will be managed by the Treasury Department with guidance from Secretaries Bessent and Lutnick
- Bitcoin sales from the reserve are prohibited, positioning it as a permanent store of value similar to gold reserves
President Trump signed an executive order on March 6 that creates a new Strategic Bitcoin Reserve. The program marks the first formal recognition of Bitcoin as a strategic asset by the US government.
The reserve will be stocked with digital assets that were seized in criminal and civil proceedings. This includes Bitcoin confiscated from illegal operations and forfeitures from various enforcement actions.
The Treasury Department will manage the new reserve. They will also oversee a separate Digital Asset Stockpile for cryptocurrencies other than Bitcoin that have been seized by the government.
Under the terms of the executive order, the government will not sell any Bitcoin placed in the reserve. The assets will be held as a long-term store of value comparable to gold reserves.
Crypto markets reacted with disappointment to the news. Bitcoin prices dropped about 5% following the announcement, falling to around $85,000 before stabilizing slightly higher.
No New Purchases
The negative market reaction came after White House Crypto and AI Czar David Sacks clarified that no additional Bitcoin would be purchased for the reserve right now. Many investors had hoped for a government buying program.
Instead, the reserve will only contain Bitcoin that the government already owns through seizures. Sacks estimated that the US government holds roughly 200,000 Bitcoin currently.
The executive order requires a full audit of all government-held digital assets. This will be the first complete accounting of crypto holdings across federal agencies.
Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick have been instructed to develop strategies for growing the reserve. Any expansion plans must be “budget-neutral” with no additional cost to taxpayers.
No timeline was provided for when these strategies might be implemented. The lack of specific plans contributed to market uncertainty following the announcement.
The reserve announcement comes just before a White House crypto summit scheduled for March 7. Industry leaders will meet with the president to discuss the future of cryptocurrency policy.
Earlier statements by Trump had suggested the reserve might include several cryptocurrencies. He specifically mentioned Bitcoin, Ether, XRP, Solana, and Cardano.
This idea faced pushback from Bitcoin maximalists. Tyler Winklevoss commented: “I have nothing against XRP, SOL, or ADA but I do not think they are suitable for a Strategic Reserve.”
According to Sacks, the new policy could prevent losses like those incurred when the government sold seized Bitcoin too early. He claimed these premature sales cost taxpayers around $17 billion in potential value.
The executive order describes the Bitcoin Reserve as a “digital Fort Knox.” This reference to the famous gold depository highlights the government’s view of Bitcoin as a valuable asset worth preserving.
Some crypto market analysts expressed concern about the limited scope of the initial plan. Charles Edwards of Capriole Investments wrote that without new purchases, the reserve is “just a fancy title for Bitcoin holdings that already existed.”
Others worry about potential conflicts of interest. Trump’s family has launched cryptocurrency projects, and the president has a stake in a crypto platform called World Liberty Financial.
White House officials have stated that Trump has given up control of his business interests. They say his holdings are being reviewed by outside ethics lawyers.
Despite the mixed reception, supporters view the order as a step toward making the US a leader in digital asset policy. The administration has stated a goal of making the country the “crypto capital of the world.”
The executive order represents a shift in how the federal government treats digital assets. By establishing a formal reserve policy, it recognizes Bitcoin’s potential long-term value.
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