Trump Creates Strategic Bitcoin Reserves: What Does This Mean for Crypto?

President Donald Trump signed an executive order on Thursday, March 6, 2025, creating the first U.S. Strategic Bitcoin Reserves. This move comes just one day before the White House hosts its first-ever cryptocurrency summit, marking a significant shift in how the U.S. government approaches digital assets.

What Are Strategic Bitcoin Reserves?

The new reserve will be capitalized with Bitcoin that the federal government already owns—specifically cryptocurrency seized through criminal and civil asset forfeiture proceedings.

According to White House crypto czar David Sacks, the U.S. government currently holds approximately 200,000 Bitcoin, worth around $17.6 billion at current prices (roughly $88,000 per Bitcoin).

Just a few minutes ago, President Trump signed an Executive Order to establish a Strategic Bitcoin Reserve.

The Reserve will be capitalized with Bitcoin owned by the federal government that was forfeited as part of criminal or civil asset forfeiture proceedings. This means it…

— David Sacks (@davidsacks47) March 7, 2025

The executive order states:

“Bitcoin is the original cryptocurrency. Because there is a fixed supply of BTC, there is a strategic advantage to being among the first nations to create a strategic bitcoin reserve.”

In addition to the Bitcoin reserve, Trump ordered the creation of a “U.S. Digital Asset Stockpile” to manage other cryptocurrencies. Earlier in the week, Trump had mentioned potentially including Ethereum, XRP, Solana, and Cardano in government holdings.

Market Reaction and Industry Skepticism

The announcement initially caused Bitcoin’s price to drop approximately 5% to $85,000, though it later recovered to around $89,000.

Many crypto investors expressed disappointment that the order didn’t include plans to purchase additional Bitcoin, instead relying only on assets the government already owns.

Charles Edwards, founder of bitcoin-focused hedge fund Capriole Investments, called it “the most underwhelming and disappointing outcome we could have expected,” describing the reserve as “a pig in lipstick.”

JPMorgan analysts led by Nikolaos Panigirtzoglou noted in a recent report that cryptocurrency markets will likely remain under pressure in the short term due to “skepticism about congressional approval for such a strategic crypto reserve.”

The report also highlighted that several U.S. states—including Montana, North Dakota, South Dakota, and Wyoming—have already rejected similar proposals due to concerns about risk and volatility.

International central banks, including those in Switzerland, Poland, Singapore, and the European Central Bank, have similarly dismissed the idea of including Bitcoin in their reserves.

However, supporters argue that a strategic reserve would benefit taxpayers by capturing Bitcoin’s long-term price growth. Sacks claimed that premature sales of government-owned Bitcoin have already cost American taxpayers approximately $17 billion.

The executive order does leave open the possibility for future Bitcoin acquisitions, authorizing the commerce and treasury secretaries “to develop budget-neutral strategies for acquiring additional bitcoin, provided that those strategies impose no incremental costs on American taxpayers.”