Trump’s Bold Crypto Move: U.S. Sets Up Strategic Bitcoin Reserve

In a dramatic turn of events, U.S. President Donald Trump signed an executive order on Thursday to create a Strategic Bitcoin Reserve. The new reserve will contain Bitcoin (BTC) that the government seizes in criminal or civil asset forfeiture. The U.S. Treasury Department is assigned to manage the BTC reserve as per the regulations in the special office dedicated to that purpose.

Why a Bitcoin Reserve?

The directive emphasizes the importance of Bitcoin as the top cryptocurrency and says that its stable supply and dominance are important strengths. The government thinks that the U.S. has an opportunity to take the lead by being one of the first countries to set up this kind of reserve.

In addition to Bitcoin, Trump also introduced a U.S. Digital Asset Stockpile within the Treasury Department. The stockpile will handle other digital assets such as Ethereum, Solana, XRP, and Cardano. Trump had previously hinted at this proposal on social media, and the cryptocurrency industry reacted differently.

According to David Sacks, the White House’s lead on AI and cryptocurrency, the U.S. government currently holds about 200,000 BTC. Today’s price of around $87,000 per Bitcoin makes the reserve worth approximately $17.5 billion.

Crypto Industry’s Response

The cryptocurrency sector has gained unprecedented influence in Trump’s administration, in stark contrast to the tougher stance taken by former President Joe Biden. The White House is hosting its first-ever crypto summit on Friday, where industry leaders will discuss policies and regulations.

However, not everyone supports a government-backed Bitcoin reserve. Critics argue that cryptocurrencies lack intrinsic value and that holding them in reserve could be risky. Hilary Allen, a law professor at American University, warned that the moment the government starts selling its holdings, Bitcoin’s price could drop significantly.

Trump’s Crypto Plan

Despite criticism, Trump remains committed to integrating digital assets into U.S. financial strategy. His social media post confirmed that the government would stockpile Solana, XRP, and Cardano, along with Bitcoin and Ethereum.

Meanwhile, David Sacks has denied allegations of having a personal stake in the decision, stating that he sold all his crypto investments before taking office. He assured the public that he would provide an update once the ethics review process was complete.

What’s Next?

The crypto market remains highly volatile, reacting to Trump’s economic policies and broader financial trends. Many industry experts are optimistic about shaping favorable regulations with a historic summit approaching. Sei Labs’ counsel general, Gerald Gallagher, was hopeful that the negotiations in progress would steer crypto policies in the correct direction.

As things unfold, market analysts and investors will closely observe how the government manages its digital asset reserve and the potential effect it is likely to have on the market.