sortiwa
What just happened? In a move that has both intrigued and disappointed the cryptocurrency market, U.S. President Donald Trump has signed an executive order establishing a strategic reserve of cryptocurrencies. This initiative will utilize tokens already seized by the government through criminal or civil asset forfeiture proceedings. The Strategic Bitcoin Reserve will be capitalized with existing Bitcoin holdings rather than new purchases, leading to a mixed reaction from industry stakeholders.
While some in the crypto community welcomed the announcement, others expressed disappointment as Bitcoin’s price dropped more than 5% upon learning that the reserve would not involve government purchases of new tokens. However, the order leaves open the possibility of future acquisitions, provided they do not impose additional costs on taxpayers.
In addition, the U.S. Secretaries of Commerce and Treasury are authorized to develop budget-neutral strategies for acquiring more Bitcoin.
Just a few minutes ago, President Trump signed an Executive Order to establish a Strategic Bitcoin Reserve.
The Reserve will be capitalized with Bitcoin owned by the federal government that was forfeited as part of criminal or civil asset forfeiture proceedings. This means it…
– David Sacks (@davidsacks47) March 7, 2025
Andrew O’Neill, managing director of digital assets at S&P Global Ratings, told Reuters that the significance of this executive order is largely symbolic, as it marks the first time Bitcoin is formally recognized as a reserve asset of the U.S. government.
“The reserve will only include Bitcoin already owned by the US government,” O’Neill said, adding that “there is no indication yet of how much, if any, would be acquired nor a timeline.”
The executive order establishes a U.S. Digital Asset Stockpile alongside the Bitcoin reserve. This stockpile will consist of cryptocurrencies other than Bitcoin, but like the Bitcoin reserve, it will only include assets obtained through forfeiture proceedings.
Not in our wildest dreams, could we ever have imagined that one day the President of the United States would establish a Strategic Bitcoin Reserve.
– Charlie Shrem (@CharlieShrem) March 7, 2025
Trump had previously named Bitcoin, Ether, XRP, Solana, and Cardano as potential assets for a government reserve, causing a temporary spike in their market values.
Despite the symbolic recognition of Bitcoin as a strategic asset, some critics view the move as underwhelming. Charles Edwards, founder of Capriole Investments, called the order “the most underwhelming and disappointing” outcome, likening it to “a pig in lipstick” since it merely formalizes existing holdings without active buying.
The White House Crypto Summit, held after the announcement, was expected to provide further details on the administration’s plans. However, questions remain about how the reserve will function and benefit taxpayers. White House Crypto Czar David Sacks emphasized that the federal government aims to maximize the value of its holdings but did not provide specifics.
This is the most underwhelming and disappointing outcome we could have expected for this week. But also not surprising. Looks like no tangible BSR in 2025. No active buying means this is just a fancy title for Bitcoin holdings that already existed with the Govt. This is a pig in… https://t.co/KBxUkd83G8
– Charles Edwards (@caprioleio) March 7, 2025
Trump’s support for the crypto industry has been controversial, particularly given the financial backing it provided to his campaign and other Republican candidates. Critics argue that his moves could be seen as favors to an already wealthy community, while proponents believe a reserve could help taxpayers benefit from crypto’s price growth.
Sacks estimated that the U.S. government owns approximately 200,000 Bitcoin, valued at around $17.5 billion.
In related developments, the Office of the Comptroller of the Currency (OCC) clarified that national banks can engage in certain crypto activities – such as digital asset custody and participation in distributed ledger networks – without requiring advance regulatory approval.
This decision is expected to encourage more banks to enter the cryptocurrency market, providing customers with greater access to digital asset services. Additionally, the OCC’s stance lends legitimacy to cryptocurrencies, potentially accelerating mainstream adoption and investment in digital assets.
However, other regulatory bodies like the Federal Reserve and the FDIC have yet to clarify their stances. This means that while the OCC’s decision is a significant step forward, full integration of cryptocurrencies into the banking system still faces challenges.
Source link