Trump Creates Federal Bitcoin Reserve

New policy uses seized assets only

TLDR:

• Trump signed an order establishing a Strategic Bitcoin Reserve and Digital Asset Stockpile using seized crypto assets.

• No new Bitcoin purchases; the reserve is funded solely by confiscated assets.

• Treasury and Commerce Secretaries to develop budget-neutral strategies; government holds about 200,000 Bitcoin.

• Market reaction was negative, with Bitcoin prices falling 5% to around $85K.

In a bold pivot that has stirred both excitement and criticism, President Donald Trump signed an executive order on March 6 that sets up a U.S. Strategic Bitcoin Reserve and a Digital Asset Stockpile. Unlike previous initiatives, this new reserve will be entirely funded by cryptocurrency assets seized through criminal and civil forfeiture, with no taxpayer dollars being spent on new purchases.

Under the new directive, the Treasury Department will oversee the reserve, ensuring that all seized Bitcoin—and other digital assets—are held as a long-term store of value, much like the nation’s gold reserves. “This move is designed to safeguard assets that were already in government hands and to prevent future losses from premature sell-offs,” explained Treasury spokesperson Scott Bessent.

Despite initial optimism from some quarters, the market reacted sharply to the news. Bitcoin prices fell by more than 5%, dipping to around $85,000 within minutes of the announcement. Many investors expressed disappointment that the government is not planning to actively purchase additional Bitcoin, a strategy some had hoped would bolster market confidence.

White House Crypto and AI Czar David Sacks confirmed that the reserve will only use already-seized assets, emphasizing that this “ensures a zero cost to taxpayers.” Meanwhile, Commerce Secretary Howard Lutnick has been tasked with developing “budget-neutral” methods to potentially expand the reserve without incurring incremental costs.

The order mandates a comprehensive audit of the nation’s digital asset holdings—a process that could shed light on the full extent of the government’s crypto assets, estimated at approximately 200,000 Bitcoin. Notably, the new policy also prohibits the sale of these assets, positioning them as a permanent store of value for future generations.

Critics have not held back. Bitcoin advocate Tyler Winklevoss voiced his concerns, remarking, “No active buying means this is just a fancy title for assets we already knew the government held.” Crypto investor Charles Edwards echoed similar sentiments, dismissing the move as “a pig in lipstick.”

The announcement comes on the eve of a White House crypto summit scheduled for March 7, where industry leaders are expected to discuss further developments in U.S. cryptocurrency policy. As the administration continues to redefine its stance on digital assets, the long-term implications of this reserve remain to be seen. For now, the initiative marks a significant step in establishing a government-backed foothold in the burgeoning crypto landscape.

photo / Blockonome