Trump Signs Executive Order to Establish US Bitcoin Reserve, Price Falls 5.7%
In a landmark move for cryptocurrency adoption, US President Donald Trump signed an executive order on Thursday establishing a government-held Bitcoin reserve. This significant policy shift marks a dramatic evolution in the administration's approach to digital assets, particularly for a president who once dismissed Bitcoin as a "scam."
Bitcoin Price Reacts to the News
Following the announcement, Bitcoin's price experienced a substantial drop of up to 5.7%. Around 0100 GMT, the world's largest cryptocurrency had fallen to $84,707, retreating from its recent historic high of over $100,000.
The price movement came after statements from White House artificial intelligence and cryptocurrency advisor David Sacks, who clarified details about the new reserve on social media platform X.
Details of the Bitcoin Reserve Plan
According to Sacks, who serves as Trump's "crypto czar," the Strategic Bitcoin Reserve will be established using cryptocurrency already in government possession. The reserve will primarily consist of Bitcoin that was seized during criminal and civil asset forfeiture proceedings.
Key aspects of the executive order include:
- Retention of approximately 200,000 bitcoins from government seizures
- A commitment that the US will not sell any Bitcoin deposited into the reserve
- Mandate for a comprehensive audit of all government Bitcoin holdings
- Authorization for Treasury and Commerce departments to explore budget-neutral strategies to acquire additional Bitcoin
- Creation of a separate "US Digital Asset Stockpile" for holding seized cryptocurrencies other than Bitcoin
A Shift in Government Strategy
Sacks revealed a startling fact about previous government practices, noting that over the past decade, the US had sold approximately 195,000 bitcoins for just $366 million. At current prices, those same holdings would be worth an estimated $17 billion had they been retained.
"The Reserve is like a digital Fort Knox for the cryptocurrency often called 'digital gold,'" Sacks explained, emphasizing that the Bitcoin will be kept as a store of value rather than liquidated.
Trump's Evolution on Cryptocurrency
The executive order represents a remarkable transformation in President Trump's stance toward cryptocurrency. Having once publicly criticized Bitcoin, he has now positioned himself as perhaps the digital asset industry's strongest political ally.
His administration has actively rolled back regulatory measures affecting the crypto sector and urged Congress to pass crypto-friendly legislation. Further demonstrating this commitment, Trump is scheduled to host industry leaders at the White House for a "Crypto Summit" on Friday.
On Sunday, the president caused a brief market spike after unexpectedly expressing interest in the government holding other cryptocurrencies such as XRP, Solana, and Cardano.
The Bigger Picture for Bitcoin
Created in response to the 2008 financial crisis by an anonymous developer or group known as Satoshi Nakamoto, Bitcoin has a fixed supply of 21 million coins. This scarcity has led many investors to view it as a potential hedge against inflation.
Some proponents have even suggested that a strategic Bitcoin reserve could eventually help address the US national debt, though economists remain divided on this assertion.
Cryptocurrency markets experienced significant gains following Trump's election win in November 2024, with Bitcoin eventually crossing the $100,000 threshold for the first time. However, prices have since moderated as the market digests new regulatory developments.
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