President Donald Trump has made a significant move by creating a Strategic Bitcoin Reserve through an executive order. This announcement came from David Sacks, an advisor at the White House, focusing on AI and cryptocurrency.
Trump shared on social media that the government would begin stockpiling Bitcoin, Ethereum, and a few other cryptocurrencies. This decision sparked criticism from various corners of the crypto industry.
Sacks revealed that the reserve would be filled with Bitcoin acquired by the federal government via criminal or civil asset forfeiture. This means taxpayers won’t bear the cost of the reserve.
He also mentioned that the executive order would conduct a full review of the government’s digital assets. Estimates suggest the government currently holds around 200,000 Bitcoins. The government won’t sell any of the Bitcoin in this reserve, and Sacks likened it to a “digital Fort Knox.”
Another aspect of the executive order is the establishment of a U.S. Digital Asset Stockpile. This Stockpile aims to ensure careful management of the government’s digital assets under the Treasury Department’s guidance.
Under Trump’s administration, the crypto industry has gained unprecedented access to the White House. This contrasts sharply with the stricter approach taken by former President Joe Biden’s administration. For instance, the White House hosted its first-ever crypto summit recently.
As with the broader economy, the cryptocurrency market has faced volatility since Trump’s economic policies were implemented. This uncertainty often drives investors away from risky assets like cryptocurrencies.
Critics argue that cryptocurrencies lack true value and question the necessity of a government reserve. Law professor Hilary Allen has expressed skepticism, saying, “The moment you start selling, the price will drop.” She believes the endeavor may only serve to benefit current investors rather than the broader market.
In his announcement, Trump noted that, in addition to Bitcoin and Ethereum, lesser-known tokens like Solana, XRP, and Cardano would also be included in the reserve.
Sacks addressed concerns about potential conflicts of interest regarding his past investments in cryptocurrencies. He clarified that he sold all his crypto assets before Trump took office and promised to provide updates after completing the ethics process.
As the situation develops, industry leaders attending the crypto summit are expected to guide policy in a positive direction. Factors like recent job data and other economic indicators will continue to influence the market, according to legal expert Gerald Gallagher.
Stay tuned for updates on this emerging story.
