- Trump signs order creating U.S. Bitcoin reserve, markets drop in a sell-the-news reaction.
- U.S. Bitcoin Reserve to hold 200K BTC from seizures, aiming for long-term value storage.
- Despite Bitcoin reserve news, crypto markets fall 4%, with BTC dropping 5% post-announcement.
President Donald Trump has signed an executive order establishing a strategic Bitcoin reserve and U.S. digital asset stockpile. With this action, Trump has fulfilled a campaign promise to position the United States as the “crypto capital of the world.” The announcement, shared by White House AI & Crypto Czar David Sacks, shares a framework for managing government-owned cryptocurrency without additional taxpayer costs.
According to Sacks, the Strategic Bitcoin Reserve will be capitalized using approximately 200,000 Bitcoin already owned by the federal government. These coins were acquired through criminal and civil asset forfeiture proceedings. The Executive Order directs a comprehensive audit of all federal digital asset holdings, addressing the lack of previous accounting for these assets.
He noted that “premature sales of bitcoin have already cost U.S. taxpayers over $17 billion in lost value.” He suggested the new holding strategy will better maximize the government’s cryptocurrency investments.
The order states that Bitcoin deposited into the reserve will be retained as a store of value rather than sold. Sacks referred to it as a secure reserve for the cryptocurrency, often compared to “digital gold.” Additionally, the Secretaries of Treasury and Commerce are authorized to develop strategies for acquiring additional Bitcoin without impacting the budget.
Beyond Bitcoin, the Executive Order establishes a U.S. Digital Asset Stockpile to hold other cryptocurrencies acquired through forfeiture. Unlike the Bitcoin reserve, the government will not actively acquire additional assets for this stockpile beyond those obtained through enforcement actions. “The purpose of the Stockpile is responsible stewardship of the government’s digital assets under the Treasury Department,” Sacks explained.
Related: Solana CEO Opposes Government Role in US Crypto Reserves
Sacks thanked Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick for their contributions to the initiative. He also thanked Bo Hines, who served as Executive Director of the President’s Working Group on Digital Asset Markets.
Despite the policy advancement for cryptocurrency adoption, markets reacted negatively to the news. Bitcoin dropped approximately 5% in the 24 hours following the announcement, while Ethereum declined by 6% at press time. The global cryptocurrency market also retreated, with the global market capitalization falling 4.1% to $2.88 trillion.
This “sell the news” reaction follows a common pattern in cryptocurrency markets, where anticipated positive developments often lead to price increases ahead of official announcements, followed by corrections once details are revealed. The market response may also show uncertainty about implementation timelines and specific operational details not addressed in the initial announcement.
