On Thursday, President Donald Trump signed an executive order establishing a government reserve for bitcoin, marking a significant step in the cryptocurrency’s potential journey toward mainstream acceptance.
Under the new order, the U.S. government will retain an estimated 200,000 bitcoin that has been seized through criminal and civil proceedings. This move was outlined by Trump’s “crypto czar,” David Sacks, who explained that the U.S. would not sell the bitcoin but instead store it as a store of value.
The U.S. Bitcoin Reserve: A Digital Fort Knox
Sacks compared the reserve to a digital version of Fort Knox, emphasizing that it would serve as a long-term store of value. “The Reserve is like a digital Fort Knox for the cryptocurrency often called ‘digital gold,'” he said in a social media post.
The executive order mandates a “full accounting” of the government’s bitcoin holdings, which have not been fully audited until now. Sacks revealed that over the past decade, the U.S. government had sold approximately 195,000 bitcoin, netting $366 million. If those bitcoins had been retained, they would be worth about $17 billion today.
Expanding the Reserve: Future Bitcoin Acquisitions
The executive order also paves the way for the Treasury and Commerce Departments to develop “budget-neutral strategies for acquiring additional bitcoin.” This could potentially expand the reserve in the future, further positioning the U.S. government as a key player in the cryptocurrency space.
Trump’s Evolution on Cryptocurrency
Trump, once a vocal skeptic of bitcoin, has significantly changed his stance on digital currencies. A few years ago, he dismissed bitcoin as a “scam,” but now he has embraced it, along with his self-designated role as the “crypto president.” His administration has worked to craft policies that support the cryptocurrency industry, including pushing Congress to pass legislation favorable to crypto companies.
Under Trump’s leadership, the Securities and Exchange Commission (SEC) has also started easing off enforcement actions against some major cryptocurrency firms, further boosting the industry’s confidence in the government’s stance.
Bitcoin’s Role and the Market’s Reaction
Bitcoin, created in response to the 2008 financial crisis, has evolved from a niche experiment into the most well-known cryptocurrency with a market cap of approximately $1.7 trillion. Despite not being widely used for everyday purchases, bitcoin has gained popularity as a store of value that operates outside the control of banks and governments.
Supporters of bitcoin argue that its capped supply of 21 million coins makes it an excellent hedge against inflation. However, critics contend that bitcoin lacks intrinsic value, despite its impressive price growth over the years.
Some proponents of the U.S. bitcoin reserve believe that it could one day be used to help pay off the U.S. national debt.
Immediate Market Reaction and Future Plans
After Trump’s announcement, crypto prices surged, reflecting optimism about the government’s increased involvement in the cryptocurrency market. However, the immediate reaction to the executive order was more muted, with bitcoin trading around $86,000 shortly after the news.
In addition to the bitcoin reserve, the executive order also creates a “U.S. Digital Asset Stockpile” for other seized cryptocurrencies, including XRP, Solana, and Cardano. Trump’s surprise proposal to hold these lesser-known digital currencies contributed to a temporary surge in their prices earlier this week.
As the government begins to build its digital asset reserves, it signals a new era of institutional acceptance of cryptocurrencies, with the potential to reshape the landscape for digital assets in the U.S. and globally.
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