Donald Trump, the president of the United States signed an executive directive on March 6, 2025 establishing a bitcoin strategic reserve. The United States is also forming a digital asset reserve that includes some altcoins.
The market experienced a temporary decline, but then “froze up” as it waited for institutional adoption.
The Idea to the Result
In the United States, the idea to create a national crypto reserve first appeared a few decades ago. El Salvador’s recognition of bitcoin in September 2021 as a legal tender was an impetus. Soon after, the country’s authorities began buying the asset, accumulating it at government-controlled addresses.
According to Nayibtracker, El Salvador has 6,103 BTC in bitcoins as of March 2025.
First mentions of a possible US use for the asset appeared in 2021. Michael Saylor, co-founder of MicroStrategy (Strategy), spoke on this topic.
The entrepreneur stated that “#Bitcoin can be used as a treasury asset by a trust, family, company, government or institution.”
At the same time, Perianne Boring, CEO of The Digital Camber mentioned the idea of using the first crypto as a form of reserve asset.
The political climate in the U.S. from 2021 to 2024, however, prevented this idea from spreading beyond the crypto community.
Former U.S. Securities and Exchange Commission head Gary Gensler and the administration of ex-President Joseph Biden were both skeptical about digital assets. The main reason for this was the high-profile bankruptcy of companies involved in the digital asset industry.
As the 2024 presidential elections approach, there has been a significant change in rhetoric surrounding bitcoin. Donald Trump has started to actively support the bitcoin industry as he runs for his second term.
He promised to make America the “crypto-capital of the world” and create an economy that was “digital assets friendly.” The idea to create a bitcoin strategic reserve began to take shape around that time.
In July 2017, Trump announced at the Bitcoin 2024 Conference that gold and silver would be overtaken by the cryptocurrency in terms of market capitalization. On that day, the future president announced his intention to retain government-controlled assets. On the basis of them, he intended to create “the central core” of a national strategic bitcoin stockpile.
Almost instantly after, Senator Cynthia Lummis presented the BITCOIN act of 2024. The Federal Reserve was required to buy up to 200,000 BTC annually over a period of five years. The Federal Reserve (Fed) could purchase up to 200,000 BTC per year over a five-year period.
The Fed was expected to be able, after the debt problem was solved, to use up to 10% every two years to meet any need.
Trump took office as US president in January and started promoting figures who are pro-digital assets to positions of public authority. The president also created a cryptocurrency working group and named entrepreneur David Sachs the “cryptocurrency Czar.”
Analysts and media members expected that the U.S. President would announce the creation a Bitcoin reserve during the Digital Asset Summit. The event will be held at the White House in 2025.
Trump, however, did not await the event. He signed an executive directive on March 6, 2020 establishing the U.S. Strategic Bitcoin Reserve Fund (SBR). Document’s main provisions are:
- The fund was created using assets confiscated during criminal and civil proceedings;
- Bitcoins are only added to the Reserve through fines and confiscations – any additional purchases require a government order;
- The United States Digital Asset Stockpile is being established to hold confiscated altcoins.
- Both reserves are managed by the U.S. Treasury Department through newly created offices.
- Bitcoins in the strategic reserve cannot be sold, as they are considered the reserve assets of the country;
- Only digital assets confiscated by law can be used to support the police, return money to crime victims or to comply with court orders.
- Department of Commerce and Treasury of the United States are to create a plan for safe asset management and determine whether legislative action is needed;
- All federal agencies are required to provide data complete on all digital assets they possess within 30 days of receipt for the transfer into the Strategic Reserve and Stockpile.
Sachs has noted, however, that the current fund is just the beginning of what it will eventually look like.
Expectation vs Reality
Discussions in the community were triggered by the announcement that the Bitcoin reserve would be created. The community was expecting that President Lummis and his team, when creating the text for the document, would follow the bill of Senator Lummis.
The government essentially adopted the same strategy as other institutional investors, who buy bitcoins in large quantities for storage over a long period of time. Some people speculated the government was going to buy bitcoins worth hundreds of millions of dollars. This could lead to a rate increase.
As can be seen from the document final, there is no mechanism for buying bitcoins with public funds at launch. The community has been a little upset by this.
Nick Ruck of LVRG Research noted in particular that traders had been disappointed by the Reserve Decree because it was “not optimistic enough.”
Ruck stated that the announcement “was an opportunity for news selling” as the differences in expectations decreased the perceived buying pressure on the cryptocurrency market.
The document is not very specific, according to 10xResearch analysts. The risk of disappointment is high, they said.
While this was a good first step, it has been far different from what most expected. Although additional measures could be announced in the future, the recent events highlight the gap between an ideal scenario and actual policy implementation,” 10xResearch noted.
A number of users expressed dissatisfaction over the contents of the decree. According to them, “crypto president”‘s failure to mention specific plans for purchasing bitcoin was not what industry had expected.
Sachs estimates that the U.S. Government owns 200,000 BTC. These assets were accumulated through two investigations, the Silk Road darknet and Bitfinex hacking.
Alex Thorne, the head of research at Galaxy Digital, believes that US authorities will only be able to count on 86,000 BTC by the end of this day. Bitfinex has the right to 112,000 BTC that were stolen. According to him, the US government controls 198,000 BTC worth of assets.
“…markets will be able to tell the difference between “seized”, “forfeited”, and “seized”. Thorne said.
Many notable figures in the industry and institutions were also optimistic regarding the document. Michael Saylor said that the U.S. has now the largest bitcoin reserves in the world.
Brian Armstrong, CEO of Coinbase, expressed his confidence that the G20 nations will soon establish similar funds. He called Trump’s decision “incredible.”
Matt Hougan is the Chief Investment Officer at Bitwise Asset Management. He said that President Obama’s Executive Order has reduced the chances of bitcoin being illegal. It will become much more difficult for the U.S. to ban bitcoin in the future if the desire arises.
Hougan added, “This will accelerate the pace of other countries considering their strategic crypto reserve as they can now get ahead in a very short time frame before the U.S. makes any additional purchases.”
In comments made to Cointelegraph, Sygnum Bank’s representatives noted that the possibility of a 20-fold rise in price was high. This could occur, according to their view, if Bitcoin continues to be used by strategic US Government funds on both the federal and regional level.
The company acknowledged that, in order for this to occur, the government must present a realistic mechanism to replenish bitcoin reserves.
Is it possible to calm down before the storm?
TradingView reports that the Bitcoin exchange rate dropped almost 7% in just 30 minutes after the public release of the draft decree. It went from $91,000 down to $84,700.
In a matter of hours, the asset recovered most of its lost positions. At the time of publishing this material the price is around $89 430. At this point, the weekly growth is around 5.5%.
The news about the bitcoin reserve was not able to boost market growth, and it also faced significant volatility.
Altcoins also experienced an initial decline, before quickly returning to their previous levels. According to CoinMarketCap, over the last 24 hours the value of the 10 top assets was down by an average 2%.
Analysts attribute the market’s behavior, as we have already noted, to a partial disappointment at the absence of any government purchases of Bitcoin. They also raised concerns over the possibility of a reduction in the fund as a result of returning previously confiscated property. Thorne, as well as crypto expert Samson Mouw, both spoke on this topic.
Looking Towards the Future
Experts point out that there are both global advantages from creating a Bitcoin reserve, and risks associated with the U.S. stockpile of digital assets. The first is attributed to:
- Possibility of creating a fund with high yield on the base of the very first cryptocurrency
- Positioning of the USA in the Cryptoindustry as the leader;
- Further legalization is needed for the cannabis industry.
Analysts cite the following risks:
- Bitcoin volatility;
- Lack of clarity on the purchase of cryptocurrency, and details about digital asset reserves;
- The likelihood that the policy will be revised in the case of a new administration.
Many market participants believe that the creation of the U.S. Strategic Bitcoin Reserve is an important event which confirms the acceptance of cryptocurrency at state level. Nevertheless, many market representatives point out that there is no active procurement at this time.
According to some analysts, there may be more clarity in the future regarding the structure of this fund. As mentioned above, Donald Trump is scheduled to speak at the White House’s crypto summit, which will take place on 7 March. Some members of the crypto community believe that the President will give new information about the bitcoin strategic reserve at this event.
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