On Thursday, President Donald Trump issued an executive order to create a government reserve for bitcoin, marking a significant step towards the cryptocurrency’s potential acceptance in mainstream finance.
Trump is set to address the public at 3 p.m. ET. Watch the live stream in the player above.
As part of this new directive, the U.S. government will retain the estimated 200,000 bitcoins that have been seized during criminal and civil actions, as stated by Trump’s “crypto czar,” David Sacks.
“The U.S. will not liquidate any bitcoin placed into the Reserve. It will serve as a store of value. The Reserve will function like a digital Fort Knox for what is often referred to as ‘digital gold,’” Sacks mentioned on social media.
The executive order mandates a “full accounting” of the government’s bitcoin assets, which Sacks pointed out have never undergone a comprehensive audit. He noted that over the past decade, the U.S. government has sold approximately 195,000 bitcoins, worth around $366 million at the time. If those bitcoins had been retained, they would now be valued at nearly $17 billion.
According to Sacks, the order enables the Treasury and Commerce Departments “to devise budget-neutral strategies for acquiring additional bitcoin.”
Once a critic who previously claimed that bitcoin “seems like a scam,” Trump has since adopted a more favorable stance on digital currencies, taking on the unofficial title of “crypto president” in ways that could benefit the crypto industry as well as his own financial interests. Wealthy members of the crypto sector, feeling unfairly targeted by the Biden administration, significantly invested in supporting Trump during the past election.
Establishing a bitcoin reserve was among several crypto-related commitments Trump made during his campaign last year. He is also advocating for Congress to enact legislation favorable to the industry, and under his leadership, the Securities and Exchange Commission has started easing enforcement against certain major crypto entities. On Friday, Trump will host key industry leaders at a “Crypto Summit” at the White House.
Bitcoin, the oldest and most widely recognized cryptocurrency, was created in response to the 2008 financial crisis by an anonymous individual or group. It has evolved from a niche endeavor among libertarian cryptography enthusiasts into an asset boasting a market capitalization of roughly $1.7 trillion. While it hasn’t gained traction as a currency for everyday transactions, bitcoin has become popular as a store of value that operates outside the control of banks, governments, and other influential bodies.
With a supply limit of 21 million coins, bitcoin’s built-in scarcity is touted by supporters as an effective hedge against inflation. Critics, however, argue that bitcoin lacks intrinsic value, yet it has consistently surpassed skeptics with notable price surges. Advocates of a strategic bitcoin reserve suggest it could potentially help address the U.S. national debt in the future.
After Trump’s victory last year, cryptocurrency prices surged, and when bitcoin first surpassed $100,000 in early December, Trump boasted about it on social media, posting “YOU’RE WELCOME!!!”
However, prices have since stabilized. Trump’s executive order did not trigger an immediate price increase for bitcoin, which was trading around $86,000 just after his announcement.
The executive order also establishes a “U.S. Digital Asset Stockpile,” where the government will manage seized cryptocurrencies beyond bitcoin. On Sunday, Trump briefly influenced crypto prices upward following an unexpected announcement advocating for the government to hold lesser-known cryptocurrencies like XRP, Solana, and Cardano.
