Bitcoin and US Reserve – What is going on?

Past week, the Trump White House announced a project that has been widely welcomed by the crypto industry—the Bitcoin Strategic Reserve.

On March 6, 2025, President Donald Trump signed an executive order establishing a U.S. Strategic Bitcoin Reserve and Crypto Asset Stockpile. This marks a historic milestone for Bitcoin, which was first launched in January 2009, as well as for the broader digital asset industry. The move reflects a significant policy shift, with the U.S. government now recognizing Bitcoin as a strategic asset, similar to traditional reserves like gold.

Trump stated in a Truth Social post that his January executive order on digital assets would lead to the creation of a stockpile of cryptos, including Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA). These specific cryptos had not been disclosed previously.

The inclusion of Solana in the crypto stockpile has drawn attention, particularly given that Trump launched his "Official Trump" meme coin on Solana’s blockchain before his inauguration.

But what exactly is the Strategic Bitcoin Reserve, how will it function, and how has it impacted Bitcoin's price? — You will find all the details in our blog.

What is the Strategic Bitcoin Reserve?

Strategic reserves are government-controlled stockpiles of essential assets, designed to reduce risks related to national security or economic stability. One of the most well-known examples is the U.S. Strategic Petroleum Reserve (SPR), which stores crude oil to safeguard against supply disruptions. Additionally, governments—including the United States—maintain reserves of gold and foreign currencies to help stabilize national economies.

Under Trump’s executive order, the United States would consolidate all Bitcoin seized through criminal and civil forfeitures and hold it as a reserve asset, much like how the country stockpiles gold and petroleum.

Supporters of this move believe the Bitcoin reserve could serve as a hedge against financial instability, particularly in a future where cryptos replace traditional fiat currencies issued by central banks. They argue that investment in Bitcoin could contribute to reducing the national debt. However, if the United States were to sell its Bitcoin holdings, it could trigger a price drop, and unlike petroleum, Bitcoin cannot be used to power the economy.

The core argument in favor of a Bitcoin reserve is the possibility that the Federal Reserve might mismanage the U.S. dollar entirely.

On the other hand, critics question the wisdom of linking America’s financial future to a highly volatile and speculative asset. They argue that the reserve is simply a strategy to boost Bitcoin’s value, benefiting early investors, including the 30 crypto CEOs who recently met with Trump at the White House.

But at the end of the day by creating a Strategic Bitcoin Reserve, the U.S. government is effectively classifying Bitcoin alongside traditional reserves like gold and foreign currencies. This move further legitimizes Bitcoin as an emerging asset class, despite its reputation for volatility, uncertainty, and skepticism.

How does it work?

The White House order states that the Strategic Bitcoin Reserve will be built exclusively from Bitcoin seized by law enforcement. The U.S. government already holds an estimated $17 billion worth of Bitcoin, accumulated from various legal cases over the years. Typically, the Treasury sells these holdings to compensate victims and support law enforcement efforts.

Officials have emphasized that no taxpayer dollars will be used to acquire additional Bitcoin. However, the order grants the Treasury and Commerce departments the authority to develop “budget-neutral” strategies for purchasing more Bitcoin.

Bitcoin Price – Why did it fall?

When news broke that President Trump was preparing to sign the executive order (EO) ahead of the March 7, 2025, Crypto Summit, Bitcoin’s price surged past $90,000. Traders speculated that the U.S. government would begin actively acquiring Bitcoin, especially with only 1.5 million BTC remaining from the total 21 million supply.

However, once it became clear that the reserve would rely solely on confiscated Bitcoin rather than new government purchases, the market quickly reversed course. Adding to the uncertainty, an executive order is not a law, meaning it could be overturned by any future president unless Congress takes legislative action, leaving the long-term future of the Strategic Bitcoin Reserve in question.

On Thursday night, after Trump officially signed the executive order, Bitcoin’s price dropped from around $90,000 to $85,000. Investors who had positioned themselves for a large-scale institutional Bitcoin buying spree began selling off their holdings, triggering a market downturn that saw Bitcoin’s price fall below $82,000 within hours.

This market reaction underscored a larger issue—many traders had assumed the reserve would operate like a central bank accumulating gold. Instead, the reliance on seized Bitcoin raised concerns about whether the reserve was politically motivated rather than a well-structured economic strategy. The fact that the U.S. government’s Bitcoin stockpile would be built entirely from confiscations—rather than open-market purchases—sparked ethical concerns over whether the reserve was a legitimate financial strategy or simply a way to monetize legal seizures.

Additionally, some investors saw the plan as conflicting with Bitcoin’s core principles of decentralization and voluntary participation.

What does it mean for the Crypto Industry?

Trump’s Bitcoin reserve initiative has received both praise and skepticism, highlighting the broader tensions within the crypto industry regarding government involvement in digital assets.

There is still uncertainty surrounding how the reserve would function or how it would benefit taxpayers. Trump’s pro-crypto stance—following millions of dollars in campaign support from the crypto industry and Republican donors—has raised concerns among some conservatives and crypto advocates. They worry that the initiative may amount to favors for the wealthy elite while also potentially undermining the legitimacy of the digital asset sector.

After years of strict regulatory policies under the Biden administration, Trump’s initiative signals a significant shift toward institutional acceptance of Bitcoin. However, the lack of a clear strategy for managing the reserve, along with suspicions of political motivations, has left many questions unanswered. If the government mismanages the initiative—whether through non-transparent policies, insider deals, or future market interference—it could damage Bitcoin’s reputation as a neutral, censorship-resistant asset.

Additionally, Trump’s support for the crypto industry has led to conflict-of-interest concerns. His family has previously launched crypto meme coins, and the president himself holds a stake in World Liberty Financial, a crypto platform.

The coming weeks will reveal whether the Strategic Bitcoin Reserve represents a bold step toward financial modernization or a high-risk political experiment. For now, uncertainty continues to weigh on the digital asset market, and the debate over Bitcoin’s role in U.S. economic policy remains unresolved.

Summary

President Donald Trump’s executive order on March 6, 2025, establishes a U.S. Strategic Bitcoin Reserve and Crypto Asset Stockpile, signaling a major policy shift by recognizing Bitcoin as a strategic asset alongside gold. The reserve will be built exclusively from Bitcoin seized by law enforcement, with an estimated $17 billion worth of BTC already in U.S. possession.

The announcement initially pushed Bitcoin’s price above $90,000, as traders speculated that the U.S. government would actively buy Bitcoin. However, once it became clear that the reserve would only rely on confiscated assets, the market reversed course, causing Bitcoin to drop below $82,000.

The long-term impact of the Strategic Bitcoin Reserve remains uncertain, especially since an executive order is not law and could be overturned by a future president. In the coming weeks, it will become clearer whether this initiative is a bold step toward financial modernization or a risky political experiment.