Athira Sethu
Kochi, 7 March 2025
U.S. President Donald Trump issued an executive order to establish a strategic bitcoin reserve, a day before receiving cryptocurrency industry executives at the White House. The reserve will be topped up with bitcoin confiscated by the government from criminal or civil asset forfeiture proceedings, as White House crypto advisor David Sacks described.
During the crypto summit on Friday, Trump will reportedly make a formal declaration of his intention to construct a reserve holding bitcoin and four other cryptocurrencies. Previously this week, he identified the five cryptocurrencies he intends to have in this reserve: bitcoin, ether, XRP, solana, and cardano. This statement made the market values of these cryptocurrencies surge.
It’s not clear how this reserve will work or how it will help taxpayers. Sacks said the government will have a plan to oversee and grow the value of its holdings in the reserve but didn’t elaborate. The U.S. won’t sell the bitcoin in the reserve, which will be held as a store of value, like a “digital Fort Knox,” Sacks said.
Trump’s actions to prop up the cryptocurrency market, which supported him and fellow Republicans in the November elections, have come under fire. Others fear it may disproportionately benefit rich crypto players and undermine the validity of digital money.
Advocates contend the reserve would enable taxpayers to enjoy the appreciation in the value of cryptocurrencies. The announcement saw bitcoin dip briefly by over 5%, sliding to below $85,000 before bouncing back to $88,107. Founder of a bitcoin-focused hedge fund, Charles Edwards, denounced the reserve as an “underwhelming” action with no significant market effect.
Trump’s executive order also instructs the Treasury and Commerce secretaries to develop “budget-neutral strategies” for buying more bitcoin, with no additional taxpayer cost. Sacks put the U.S. government’s existing holdings at approximately 200,000 bitcoins, but it is not known how he arrived at that figure. There are also fears of possible conflicts of interest, as Trump’s family has started cryptocurrency meme coins, and he has an interest in a crypto platform. His aides report that he has turned over management of his business dealings to outside ethics attorneys.
