Trump Establishes Strategic Bitcoin Reserve Without Purchasing New Ones

U.S. President Donald Trump has signed an executive order creating strategic reserves of bitcoin and a stockpile of digital assets, which will initially utilize cryptocurrencies seized in federal criminal proceedings.

– The reserves will be capitalized with bitcoin owned by the federal government that has been seized as part of a criminal or civil asset forfeiture proceeding – said David Sacks, the person in charge of crypto at the White House.

Additionally, a White House report dated March 6 states that the order also establishes the ‘USA Digital Asset Stockpile’, which Sacks said will consist of other cryptocurrencies besides bitcoin.

Bloomberg previously reported that Trump is expected to sign the executive order to establish the bitcoin reserve during the crypto summit at the White House on March 7, with one option that included cryptocurrencies owned by the government.

Sacks stated that the bitcoin reserve is a ‘digital Fort Knox for cryptocurrencies’, and the U.S. will not sell any bitcoin placed in the reserve.

– It will be kept as a store of value – he added.

The White House stated that bitcoin owned by the Department of the Treasury will become the reserve, and other federal agencies will assess their legal authority to transfer any bitcoin they own into the reserve. It was added that the Secretaries of the Treasury and Commerce will develop ‘budget-neutral strategies’ for acquiring more bitcoin for the reserve, provided that these strategies do not impose incremental costs on U.S. taxpayers.

Regarding the digital asset stockpile, Sacks said its purpose is to responsibly manage the government’s digital assets under the Department of the Treasury. He specifically added that the government will not purchase additional cryptocurrencies for the stockpile other than those obtained through forfeiture proceedings, and the Secretary of the Treasury may determine strategies for responsible management, including potential sales from the stockpile.

A few days earlier, on March 3, Trump announced on his platform Truth Social that the crypto reserves would include ​​xrp, solana and cardano. He later added that ethereum and bitcoin would be the ‘heart’ of the reserve.

Data from Arkham Intelligence shows that the U.S. government does not hold any xrp, solana, or cardano among the cryptocurrencies worth 18.28 billion dollars under its control.

The largest holding is 198,109 bitcoins, worth 17.87 billion dollars. Ethereum valued at 119 million dollars, is only the third largest holding behind the stablecoin USDT worth 122 million dollars.

However, Sacks claimed that a complete audit of the government’s crypto holdings has never been conducted, and Trump’s latest order directs a full accounting of the federal government’s digital asset holdings.

The White House announced that agencies must provide a complete accounting of their crypto stockpiles to the Secretary of the Treasury and the presidential crypto working group established in January through an executive order to study the creation of crypto stockpiles.

Bitcoin Price Drops After Announcement

Market participants had hoped that the U.S. government would announce a plan to purchase more bitcoin, but Sacks wrote on X that they would only use bitcoin already owned from criminal cases, although they would seek to develop ‘budget-neutral’ strategies for acquiring additional bitcoins.

Bitcoin fell by 7 percent, from 91,255 dollars to 84,585 dollars, in just 40 minutes after the news was announced.

Industry analysts see positive aspects even though this may not be the most optimistic announcement for the industry; some were surprised that the price of bitcoin dropped after the announcement.