Bitcoin investors have been speculating for months about a possible US Bitcoin reserve. Will the United States buy bitcoins from the open market? Will the reserve include other cryptocurrencies? How big is the reserve? And so on.
This week, the matter finally received confirmation when President Donald Trump signed an executive order on Thursday regarding the Bitcoin reserve. Just a few minutes later, crypto czar David Sacks made the following X post.
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
We have said from the beginning that the Bitcoin reserve will be formed from confiscated bitcoins and that significant purchases of bitcoins (or other cryptos) from the market are not realistic. This is precisely what happened. You can read the details of the executive order here.
The United States is creating a Bitcoin reserve from government-seized bitcoins. According to David Sacks, this pot is estimated to be around 200,000 BTC or just over $17 billion at today’s price. At the same time, a detailed audit of government-owned bitcoins will be conducted.
Bitcoins in the Bitcoin reserve will be transferred to the US Treasury Department, and their sales will be stopped immediately. Like gold, the Treasury Department will hold the bitcoins as a reserve asset.
What about buying bitcoins? We have said from the beginning that a massive program of buying from the market does not sound realistic when the Trump administration is simultaneously trying to cut the deficits and laying off government workers. A bill for purchasing bitcoins would not get enough support in Congress.
The executive order states the following:
The Secretaries of Treasury and Commerce are authorized to develop budget-neutral strategies for acquiring additional bitcoin, provided that those strategies impose no incremental costs on American taxpayers.
This statement leaves the door open for possible future purchases, but the funds must come from selling other assets. Time will tell whether the Trump administration is interested in increasing the reserve. At least for now, there is no significant purchase program in sight.
What about other cryptocurrencies? We reported on Monday about Donald Trump’s unusual social media post last Sunday. Trump mentioned XRP, Solana, and Cardano (and later Bitcoin and Ethereum) as part of the new crypto reserve.
Crypto czar David Sacks addressed this in an interview with Bloomberg, which you can view in the embed below.
🚨 JUST IN: David Sacks stated that $ADA, $SOL, and $XRP were mentioned by Trump solely because they are among the top cryptocurrencies by market capitalization. pic.twitter.com/soys8IOcut
— Cointelegraph (@Cointelegraph) March 7, 2025
Sacks commented on the subject as follows:
The president just mentioned the top 5 cryptocurrencies by market cap.
Sacks’ message is that Trump’s comments should not be taken literally. This would seem obvious to anyone following Donald Trump, but many crypto investors wanted to believe otherwise. So, the United States will not buy XRP, Solana, or Cardano from the market under any circumstances.
Instead, the United States is creating a separate “altcoin reserve” called the Digital Asset Stockpile. Trump’s new executive order addresses the issue as follows.
It also established a U.S. Digital Asset Stockpile, consisting of digital assets other than bitcoin owned by the Department of Treasury that was forfeited in criminal or civil asset forfeiture proceedings.
The Digital Asset Stockpile includes government-seized cryptocurrencies other than Bitcoin. The United States likely has dozens of cryptocurrencies in small quantities from seizures over the years.
There is no intention to increase this “altcoin reserve,” the Treasury Department can sell these assets if it wishes. These sales could then be used to purchase more bitcoins.
The market reaction has been moderately negative since Thursday. At the time of writing, Bitcoin’s price is down about eight percent from Thursday’s highs, and many altcoins are down a couple dozen percent.
However, it is worth noting that Cardano and XRP, which received a massive boost from fake news on Sunday, are still higher than before the news. Even though it was completely fake news. Like the rest of the altcoin market, Solana has lost all of its Sunday gains.
On Friday, the White House Crypto Summit took place. The most important people in the crypto industry gathered in Washington, led by Trump and David Sacks. Here’s what Ripple CEO Brad Garlinghouse posted on X about the event.
Some weeks feel like months in crypto…this was one of them. From the @WhiteHouse Crypto Summit to the @CFTC CEO Roundtable and the sheer amount of news announced (hooray for @NatCryptoAssoc!), it’s been quite a few days.
There’s been a lot of talk about what this White House… pic.twitter.com/Laf9bJ0l7V
— Brad Garlinghouse (@bgarlinghouse) March 7, 2025
There was no significant news from the Crypto Summit. Rumors circulated on social media that Trump would announce tax exemptions for Bitcoin and crypto trading. In reality, there are no plans for this.
Trump, however, said he wants a stablecoin bill on his desk within six months. This is the area where his crypto task force will focus on next. This Bitcoin Magazine article includes a report from the Crypto Summit for those interested.
One group has been very optimistic about the news: Bitcoin maximalists. The US administration clearly distinguishes between Bitcoin and altcoins and is potentially planning to increase its reserves.
Some Bitcoin investors were disappointed that the United States would not start purchasing new bitcoins from the market. However, as previously stated, these hopes have been unrealistic.
In our opinion, the Trump administration made a well-anticipated decision. Its most significant impact will be as a signal to institutional investors rather than potential Bitcoin purchases.
The US Treasury Department will hold tens of billions of dollars worth of Bitcoins in the future. At the same time, the world’s largest asset management company, Blackrock, is one of the biggest advocates of Bitcoin and offers Bitcoin ETF products. These are powerful signals in the investment world.