U.S. President Donald Trump signed an executive order to create a Strategic Bitcoin Reserve using Bitcoin already owned by the government through criminal or civil asset seizures. While the move officially recognized Bitcoin as a government reserve asset, the market was disappointed with no clear plans for new purchases.
The announcement caused the price of Bitcoin to fall by 5% to $85,000 before recovering to $89,200. The order also allowed for the possibility of future Bitcoin purchases as long as it did not cost taxpayers money. Financial experts said the order was symbolic with no clear timeline for adding assets.
In addition to Bitcoin, the U.S. government also established a U.S. Digital Asset Stock that includes other tokens such as Ether, XRP, Solana, and Cardano, but there are no plans to add to the holdings other than through asset seizures. Crypto markets surged following Trump’s announcement of the five digital assets that will be included in the government reserve.
Crypto advocates see the move as an opportunity for taxpayers to benefit from rising crypto prices, but some argue it is simply a political ploy to benefit wealthy investors. Trump also received significant support from the crypto industry in the November election, raising concerns about potential conflicts of interest.
David Sacks, the White House's crypto chief, said the U.S. government owns about 200,000 Bitcoins and has suffered significant losses from the initial sale of the digital currency. However, it is unclear how this estimate was derived and how the government will use these reserves for the benefit of the country's economy.
Trump's support for the crypto industry has also raised ethical questions, especially since his family was involved in the launch of a crypto meme coin and he has a stake in a digital currency platform. While his advisers claim that Trump has relinquished control of his business, questions remain about his integrity and political influence over crypto policy.
