Trump Launches the U.S. Bitcoin Reserve: The First Step Toward a Crypto Empire?

As David Sacks, the White House’s “crypto czar,” explained, both reserves will initially be funded with confiscated cryptocurrencies. According to Bitbo, the government currently holds approximately 207,000 BTC (valued at around $18.2 billion). However, since no full audit has ever been conducted, the actual amount could be even higher.

This approach allows authorities to avoid potential criticism for using public funds. In the near future, the U.S. Treasury Department is expected to present strategies for expanding the bitcoin reserve without relying on taxpayer money.

The U.S. will not sell any bitcoin deposited into the Reserve. It will be kept as a store of value. The Reserve is like a digital Fort Knox for the cryptocurrency often called “digital gold.” Premature sales of bitcoin have already cost U.S. taxpayers over $17 billion in lost value. Now the federal government will have a strategy to maximize the value of its holdings,

 Sacks added.

Previously, the U.S. president stated that BTC and ETH would form the core of the crypto reserve. However, the administration has now decided to focus solely on Bitcoin. As a result, the digital asset reserve will include ETH, XRP, SOL, and ADA, which the government will not purchase but can sell at any time.

However, Arkham Intelligence reports that the U.S. government’s $18.28 billion in crypto holdings does not yet include XRP, SOL, or ADA.

What Are the Reasons Behind the U.S. Bitcoin Reserve?

The establishment of a bitcoin reserve is not just a political move but a strategic initiative to safeguard the country’s financial interests in the era of digital transformation. In the long term, it could serve as a stability mechanism, reducing the risk of technological lag without relying on taxpayer funds.

For the crypto industry, this initiative elevates Bitcoin’s status as digital gold and attracts more institutional investors to the market.

Related: Buterin, Saylor, and More: Who’s Attending Trump’s Crypto Summit?

Market and Community Reaction

Despite the bold nature of the initiative, Bitcoin’s price unexpectedly dropped by 6% following the official announcement, falling from $90,400 to $84,900. The decline was primarily driven by trader disappointment, as many had expected the government to announce new Bitcoin purchases, which the reserve doctrine explicitly ruled out. However, several crypto industry leaders have stated that the market panic is unwarranted. Moreover, they view the announcement as a long-term bullish signal.

For example, Matt Hougan, Chief Investment Officer at Bitwise, called Trump’s executive order a turning point for the crypto industry. He believes this decision will inspire other countries to establish similar strategic crypto reserves, significantly enhance Bitcoin’s status and legitimacy, and all but eliminate the possibility of a U.S. government ban on digital assets.

Strategic Bitcoin Reserve makes it much harder for institutions — from national account advisor platforms to quasi-governmental agencies like the IMF — to position bitcoin as somehow dangerous or inappropriate to hold,

said Hougan.

Coinbase CEO Brian Armstrong holds a similar view. He believes that most G20 countries will take notice of Bitcoin and follow the U.S. lead by establishing their own strategic Bitcoin reserves. Notably, China, the second-largest Bitcoin holder with 194,000 BTC, has so far pursued a drastically different approach to crypto regulation.

Despite the short-term market correction caused by disappointment over the lack of government BTC purchases, analysts consider Trump’s initiative a significant and even revolutionary step. In the coming months, crypto market activity will likely increase, and central banks, regulators, and major financial institutions may adjust their policies accordingly.

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