WASHINGTON, March 7 – U.S. President Donald Trump has signed an executive order to create a “Strategic Bitcoin Reserve”, utilizing Bitcoin already owned by the government through asset forfeiture, rather than purchasing new tokens. The move disappointed some investors hoping for fresh institutional demand.
The announcement, made Thursday ahead of Trump’s planned meeting with crypto executives at the White House, triggered a 5% Bitcoin drop to $85,000 before rebounding to $89,200 in early European trading.
White House crypto czar David Sacks confirmed that the reserve would be funded with seized Bitcoin from criminal and civil cases. The order leaves room for future acquisitions, authorizing the Commerce and Treasury Secretaries to explore “budget-neutral strategies” for additional purchases, provided they impose no costs on taxpayers.
“The significance of this order is largely symbolic—it formally recognizes Bitcoin as a U.S. reserve asset for the first time,” said Andrew O’Neill, digital assets director at S&P Global Ratings. However, he noted that no official purchase plan or timeline has been disclosed.
Market Reaction and Crypto Industry Response
Trump’s previous hints at a government-backed Bitcoin reserve had driven BTC to an all-time high of $109,071.86 in January. However, the lack of active buying left some market participants frustrated.
“This is the most underwhelming and disappointing outcome we could have expected,” said Charles Edwards, founder of Capriole Investments. “No active buying means this is just a fancy label for Bitcoin holdings the government already had—a pig in lipstick.”
Beyond Bitcoin, the government will also create a “U.S. Digital Asset Stockpile”, comprising seized altcoins such as Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA). However, Sacks confirmed that no additional tokens would be acquired beyond forfeitures.
A Digital Fort Knox?
Despite industry skepticism, Trump’s executive order marks a significant policy shift in Washington’s stance on crypto. According to Sacks, Bitcoin within the reserve will be held indefinitely as a strategic store of value, akin to a “digital Fort Knox”.
“The U.S. will not sell Bitcoin deposited into the reserve. It will be stored as a long-term hedge, recognizing its role as ‘digital gold,’” Sacks said.
Trump’s crypto-friendly policies have raised concerns over potential conflicts of interest, given his family’s involvement in meme coin ventures and his reported stake in World Liberty Financial, a crypto platform. His aides insist that ethics lawyers are reviewing these ties.
With the crypto industry heavily backing Trump’s 2024 campaign, today’s White House crypto summit is expected to further define the administration’s digital asset strategy.