United States President Donald Trump signed an executive order on 6 March 2025 establishing the Strategic Bitcoin Reserve and the United States Digital Asset Stockpile. The official X account of the White House posted that the U.S. will become the Bitcoin superpower of the world and the initiative is part of ushering in the supposed Golden Age of America.
Explaining the United States Strategic Bitcoin Reserve of the Trump Administration: Purpose and Criticisms
Purpose
Section 1 of the Executive Order mentioned that both the security and scarcity of Bitcoin make it a digital gold and establishing a strategic reserve provides the U.S. with a strategic advantage. The federal government noted that it is in the interest of the country to thoughtfully manage national ownership and control of resources like bitcoin and other cryptocurrencies.
The Strategic Bitcoin Reserve is initially funded by about 200000 bitcoins seized through criminal and civil asset forfeitures. These will be held indefinitely and are prohibited from being sold. The main objectives of this reserve are to legitimize the cryptocurrency sector, attract industry activity to the country, and diversify the financial assets of the federal government.
Furthermore, apart from the Strategic Bitcoin Reserve, the 6 March 2025 Executive Order also establishes the United States Digital Asset Stockpile. This empowers the Department of Treasury to consolidate and manage other strategic cryptocurrencies like Ether, XRP, Solana, and Cardano. It serves as a centralized repository for digital assets other than Bitcoin.
Secretary of Commerce Howard Lutnick noted during the White House Digital Asset Summit held on 7 March 2025 that technology is the foundation of the Trump administration. The federal government will be using digital assets, including Bitcoin, and related blockchain technologies to drive the country forward and become the leader in the global economy.
South African-American entrepreneur and appointed crypto czar David Sacks explained to the hosts of the All-In Podcast that the federal government held 400000 bitcoins. It later sold 200000 for USD 360 million in total. That would amount to USD 17 billion today. He underscored that the strategic reserve would prevent similar decisions from occurring again.
Criticisms
Bitcoin traded at about USD 90400 but later dropped to 6 percent or USD 84797 following the White House announcement. This decline was attributed to unmet market expectations. Several investors thought that the federal government would actively purchase additional Bitcoin beyond merely holding assets seized from criminal and civil asset proceedings.
The value of Bitcoin later stabilized and recovered most of its losses. However, for economists skeptical toward the initiative, the Strategic Bitcoin Reserve could contribute to future volatilities in the cryptocurrency market. For example, if the government decides to sell these assets, which it will at some point, it might send the cryptocurrency market into a tailspin.
Lawrence Summers, former U.S. Treasury Secretary and Harvard University President, during an interview with Bloomberg, earlier expressed strong opinions against the initiative. He argued that accumulating Bitcoin offers no substantial economic benefit and suggested that it might be aimed at appeasing special interest groups rather than serving national interests.
The general idea has merits for other skeptics like Foundation for Research on Equal Opportunity president Avik Roy. However, the main problem is not the intention, but the fact that it does not address the issue of the federal deficit. He highlighted the importance of prioritizing budgetary reforms to tackle about USD 2 trillion annual federal deficits effectively.
An op-ed article by Annie Lowrey of The Atlantic contented that initiatives aimed at creating and maintaining a reserve of cryptocurrencies are not an investment. She contended that the entire cryptocurrency industry dwells on speculation and that cryptocurrencies are not essential to the public. The initiatives are a mere giveaway to staunch supporters of Donald Trump.
FURTHER READINGS AND REFERENCES
- All-In Podcast. 8 March 2025. “Tariffs, Trump’s Economic Endgame, Market Chaos, Bitcoin Reserve, CoreWeave IPO.” YouTube. Available online
- Bloomberg Television. 6 December 2024. “Summers Calls Idea of a National Bitcoin Reserve Crazy.” YouTube. Available online
- Lowrey, A. 5 March 2025. “The Taxpayers Are Going All In on Crypto.” The Atlantic. Available online
- The White House. 6 March 2025. “Establishment of the Strategic Bitcoin Reserve and the United States Digital Asset Stock Pile.” The White House. Available online
- The White House. 6 March 2025. “America Will Be the Bitcoin Superpower of the World.” X. Available online