Ahead of the first-ever White House Crypto Summit Friday, President Donald Trump signed an executive order establishing a strategic bitcoin reserve that a factsheet claimed delivers on his promise to make America the “crypto capital of the world.”
Trump’s order requires all federal agencies currently holding bitcoins seized as part of a criminal or civil asset forfeiture proceeding to transfer those bitcoins to the Treasury Department, which itself already has a store of bitcoins. Additionally, any other digital assets forfeited will be collected in a separate Digital Assets Stockpile.
But while Trump likely anticipates that bitcoin fans will be over the moon about this news—his announcement of the reserve and looser crypto regulations helped send bitcoin’s price to its all-time high of $109,000 in January, Reuters noted—some cryptocurrency enthusiasts were clearly disappointed that Trump’s order confirmed that the US currently has no plans to buy any more bitcoins at this time.
Bitcoin’s price briefly dropped by about 5 percent to $85,000 on the news, Reuters reported. Charles Edwards, the founder of a bitcoin-focused hedge fund called Capriole Investments, took to X (formerly Twitter) to declare that Trump’s order is “a pig in lipstick.” Currently, bitcoin’s price is around $90,500.
“This is the most underwhelming and disappointing outcome we could have expected for this week,” Edwards wrote. “No active buying means this is just a fancy title for Bitcoin holdings that already existed” with the government.
A digital assets managing director at S&P Global Ratings, Andrew O’Neill, agreed, telling Reuters that the “significance” of Trump’s order was “mainly symbolic” and provides no timeline for when more bitcoin might be acquired by the US.
In the factsheet, the White House insisted that the strategic reserve and digital assets stockpile would harness “the power of digital assets for national prosperity rather than letting them languish in limbo.”
Dubbing bitcoins “digital gold” due to its “scarcity and security”—because bitcoins are capped at 21 million and have no history of being hacked—the White House said that implementing “a policy to maximize” Bitcoin’s “strategic position as a unique store of value in the global financial system” would “promote United States leadership in digital assets such as cryptocurrency.”
“Premature sales of bitcoin have already cost US taxpayers over $17 billion,” the factsheet said.
Previously, the Department of Justice has argued that selling off cryptocurrency was more appropriate than storing bitcoins due to its price volatility. At the end of last year, a court authorized the DOJ to sell 69,370 bitcoins from “the largest cryptocurrency seizure in history.” That seizure came from the DOJ’s Silk Road investigation, and the DOJ signaled its intent to go through with the sale as recently as January.
At that time, analysts warned it might mess with Trump’s crypto reserve plans. Trump’s order this week likely serves to ensure those bitcoins don’t leave the government.
Once the strategic reserve is created, the US will never sell the bitcoins, Trump explained. But he apparently doesn’t feel comfortable rushing to buy bitcoins just yet, instead ordering the Treasury Department to “develop strategies for acquiring additional Government” bitcoins “provided that such strategies are budget neutral and do not impose incremental costs on United States taxpayers.”
Reportedly, Michael Saylor, executive chairman of Strategy—which holds more than 500,000 bitcoins—is advising the Trump administration on next steps to acquire more bitcoins. He suggested that the financing details are still murky, but the US might acquire 1 million bitcoins in the strategic reserve over the next four years by leveraging the government’s current 200,000 bitcoin holdings and slowly adding to it “day by day.”
Over the next two months, it will become clear if the US intends to start buying bitcoins this year and if legislation is needed to operationalize Trump’s order.