Trump establishes strategic Bitcoin reserve using seized assets

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Skye Jacobs

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What just happened? In a move that has both intrigued and disappointed the cryptocurrency market, U.S. President Donald Trump has signed an executive order establishing a strategic reserve of cryptocurrencies. This initiative will utilize tokens already seized by the government through criminal or civil asset forfeiture proceedings. The Strategic Bitcoin Reserve will be capitalized with existing Bitcoin holdings rather than new purchases, leading to a mixed reaction from industry stakeholders.

While some in the crypto community welcomed the announcement, others expressed disappointment as Bitcoin's price dropped more than 5% upon learning that the reserve would not involve government purchases of new tokens. However, the order leaves open the possibility of future acquisitions, provided they do not impose additional costs on taxpayers.

In addition, the U.S. Secretaries of Commerce and Treasury are authorized to develop budget-neutral strategies for acquiring more Bitcoin.

Andrew O'Neill, managing director of digital assets at S&P Global Ratings, told Reuters that the significance of this executive order is largely symbolic, as it marks the first time Bitcoin is formally recognized as a reserve asset of the U.S. government.

"The reserve will only include Bitcoin already owned by the US government," O'Neill said, adding that "there is no indication yet of how much, if any, would be acquired nor a timeline."

The executive order establishes a U.S. Digital Asset Stockpile alongside the Bitcoin reserve. This stockpile will consist of cryptocurrencies other than Bitcoin, but like the Bitcoin reserve, it will only include assets obtained through forfeiture proceedings.

Trump had previously named Bitcoin, Ether, XRP, Solana, and Cardano as potential assets for a government reserve, causing a temporary spike in their market values.

Despite the symbolic recognition of Bitcoin as a strategic asset, some critics view the move as underwhelming. Charles Edwards, founder of Capriole Investments, called the order "the most underwhelming and disappointing" outcome, likening it to "a pig in lipstick" since it merely formalizes existing holdings without active buying.

The White House Crypto Summit, held after the announcement, was expected to provide further details on the administration's plans. However, questions remain about how the reserve will function and benefit taxpayers. White House Crypto Czar David Sacks emphasized that the federal government aims to maximize the value of its holdings but did not provide specifics.

Trump's support for the crypto industry has been controversial, particularly given the financial backing it provided to his campaign and other Republican candidates. Critics argue that his moves could be seen as favors to an already wealthy community, while proponents believe a reserve could help taxpayers benefit from crypto's price growth.

Sacks estimated that the U.S. government owns approximately 200,000 Bitcoin, valued at around $17.5 billion.

In related developments, the Office of the Comptroller of the Currency (OCC) clarified that national banks can engage in certain crypto activities – such as digital asset custody and participation in distributed ledger networks – without requiring advance regulatory approval.

This decision is expected to encourage more banks to enter the cryptocurrency market, providing customers with greater access to digital asset services. Additionally, the OCC's stance lends legitimacy to cryptocurrencies, potentially accelerating mainstream adoption and investment in digital assets.

However, other regulatory bodies like the Federal Reserve and the FDIC have yet to clarify their stances. This means that while the OCC's decision is a significant step forward, full integration of cryptocurrencies into the banking system still faces challenges.

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Trump establishes strategic Bitcoin reserve using seized assets

 
"Sacks estimated that the U.S. government owns approximately 200,000 Bitcoin, valued at around $17.5 billion."

When I ran the numbers I used 200,000 x $90,000 and came out to about $18,000,000,000.

The volatility of Bitcoin is ridiculous and all the US government is doing is giving yet another ponzi scheme legitimacy.

Bitcoin pays no dividend. Bitcoin, unlike real currency, pays no interest.

There's absolutely no benefit to the US government holding Bitcoin beyond pumping the Bitcoin market. Over $80 Billion evaporated from Trump's coin BTW.

This is an Executive order which means it can be undone by the next president - who will more than likely be Democrat given the current discontent with Trump/Musk's cuts.

The government should not be gambling on crypto. That's something that should only be done with personal money. By holding 200,000, all they're doing is providing a higher bottom to what would otherwise be a worthless scam.
 
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Technically, the 'power of the purse' lies with Congress, specifically the House.
They'd actually have to authorize funding for purchases.

Normally Trump and his cronies wouldn't care about any such details. But unfortunately there's a thing that calls itself the Freedom Caucus, which is a domestic terrorist organization that holds government hostage to extract concessions that inflict maximum pain on the populace. And they'd have a field day with this leverage.

So no purchases yet, although a natural con man like Trump loves this idea.
 
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Megalomaniac said:
"Sacks estimated that the U.S. government owns approximately 200,000 Bitcoin, valued at around $17.5 billion."

When I ran the numbers I used 200,000 x $90,000 and came out to about $18,000,000,000.

The volatility of Bitcoin is ridiculous and all the US government is doing is giving yet another ponzi scheme legitimacy.

Bitcoin pays no dividend. Bitcoin, unlike real currency, pays no interest.

There's absolutely no benefit to the US government holding Bitcoin beyond pumping the Bitcoin market. Over $80 Billion evaporated from Trump's coin BTW.

This is an Executive order which means it can be undone by the next president - who will more than likely be Democrat given the current discontent with Trump/Musk's cuts.

The government should not be gambling on crypto. That's something that should only be done with personal money. By holding 200,000, all they're doing is providing a higher bottom to what would otherwise be a worthless scam.
Click to expand...
I don’t think you understand how finance works… no currency pays interest - the people who own the currency pay interest!
Same with dividends…
If Bitcoin becomes part of the banking system (which it will, it’s just a matter of time) than the banks will be paying dividends and interest to customers (and vice versa).
Currencies work on a principal of “belief”. If enough people think something is worth something, then it is!
If everyone believed that dog **** was worth $100 an ounce, then that’s how much it would be worth…
As people slowly grow accustomed to digital currencies, there will soon be little to distinguish them from “regular” money.
 
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So Trump manipulated the Bitcoin community to vote for him only at the end for his administration not to invest on it.

That's what the Trump supporters deserve disappointment and more disappointment
 
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Does anyone actually believe they will turn over that Bitcoin wallet when they leave office. There is no one but Trump, Musk and loyalist with insight into the state of those funds, no one is providing any oversight into their management.
 
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DrSuess said:
Does anyone actually believe they will turn over that Bitcoin wallet when they leave office. There is no one but Trump, Musk and loyalist with insight into the state of those funds, no one is providing any oversight into their management.
Click to expand...
Are you sure about that? While corruption is prevalent in every government, I suspect there will be a bit of federal oversight for a fund with billions of dollars in it - do you have some sort of evidence for this accusation?
 
The cited number of $17.5 billion is less than the US government spending for a day.
Labeling that "strategic reserve" is pompous bull$hit - it's milk money.

The good news is that purchases of ephemeral 'assets' are allegedly not planned. I'm not against crypto per se, people using it shouldn't be obstructed as the previous administration did ... but the government stockpiling what's essentially calculations seems odd.
 
Considering that these Bitcoins may have been stolen from the population itself, I don't see this as positive... Perhaps to say that it is contributing to market stability. But how about trying to return the assets to their rightful owners?
 
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Squid Surprise said:
Are you sure about that? While corruption is prevalent in every government, I suspect there will be a bit of federal oversight for a fund with billions of dollars in it - do you have some sort of evidence for this accusation?
Click to expand...
Yes, the reserve itself was not established by legislation only executive order, there are no laws in place (only congress can make them, only congress controls the purse strings) to govern this reserve fund and as of right now it is not under the control of congressional governance, the body that would provide the legal oversight of the funds. Congress has this oversight mandate over the purse strings as they are accountable to the American people, a Trump appointee or delegate isn't accountable to anyone but Trump.
 
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ScottSoapbox said:
That isn't PAYING interest as you claimed.
Click to expand...

True

But I think they were trying to say interest is paid on government currency bonds. You can buy bonds in nearly every currency that have interest payable on.

So the currency may not have interest payable, but the issuing of currency does.

Holding currency is no different from holding crypto in terms of hopeful appreciation against other currencies. But that is certainly not interest. And will likely go down in value.
 
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Aus spot said:
True

But I think they were tasting to say interest is paid on government currency bonds. You can buy bonds in nearly every currency that have interest payable on.

So the currency may not have interest payable, but the issuing of currency does.

Holding currency is no different from holding crypto in terms of hopeful appreciation against other currencies. But that is certainly not interest. And will likely go down in value.
Click to expand...


Yeah I think we know what the poster mean when he said currency pays interest .

Really hate sophistry arguments, when all is needs - just being pedantic .....

ie sophistry is not about discussion , but debating and point scoring - oh just F.O

or being weaselly and getting out of responsibilities - Many who claim moral superiority use just arguments to be unethical
 
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So "technically" no taxpayer money is involved?


Trump establishes strategic Bitcoin reserve using seized assets
 
The folks complaining that there won't be any additional buying are the same ones who run pump and dump schemes.
 
Aus spot said:
True

But I think they were trying to say interest is paid on government currency bonds. You can buy bonds in nearly every currency that have interest payable on.

So the currency may not have interest payable, but the issuing of currency does.

Holding currency is no different from holding crypto in terms of hopeful appreciation against other currencies. But that is certainly not interest. And will likely go down in value.
Click to expand...
A bond is a loan. Paying money to borrow an asset isn't a feature of currency. In crypto, it's called staking. In real estate, it's called rent.

Again, the OP was making the point that Bitcoin is inherently flawed compared to currency in ways that are plainly inaccurate. It's fine to not like bitcoin/crypto, but they should find a valid point before starting a flawed argument.
 
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