On Thursday, President Donald Trump issued an executive order that creates a government reserve for bitcoin, marking a significant step in the cryptocurrency’s advancement toward potential mainstream acceptance.
According to David Sacks, Trump’s appointed “crypto czar,” the new order stipulates that the U.S. government will hold onto the estimated 200,000 bitcoin already confiscated through both criminal and civil actions.
“The U.S. will not sell any bitcoin in the Reserve. It will be maintained as a store of value, akin to a digital Fort Knox for this cryptocurrency often referred to as ‘digital gold,’” Sacks stated on social media.
The executive order mandates a “complete accounting” for the government’s bitcoin assets, which Sacks noted have never undergone a comprehensive audit. He went on to mention that over the last decade, the U.S. government has sold approximately 195,000 bitcoin for about $366 million, a sum that would now be valued at around $17 billion had they been retained.
Sacks indicated that the executive order permits the Treasury and Commerce Departments “to devise budget-neutral strategies for acquiring additional bitcoin.”
Once a Bitcoin skeptic who remarked a few years ago that it ” seems like a scam,” Trump has now embraced digital currencies, assuming an unofficial role as the “crypto president” which could both support the crypto sector and benefit him and his family financially. Influential figures in the crypto community, feeling unfairly targeted by the Biden administration, invested significantly in helping Trump secure last year’s election.
Establishing a bitcoin reserve was among the various cryptocurrency-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 administration, the Securities and Exchange Commission has started to withdraw enforcement actions against certain major crypto firms. This Friday, Trump is expected to host prominent industry leaders at a White House “Crypto Summit.”
Bitcoin is the oldest and most prevalent cryptocurrency, created in response to the 2008 financial crisis by an unknown individual or group. It has evolved from a niche experiment by libertarian cryptography enthusiasts into an asset with a market capitalization of approximately $1.7 trillion. While it hasn’t been widely adopted for everyday transactions, bitcoin has gained traction as a store of value that remains independent from banks, governments, or other authoritative entities.
The supply of bitcoin is limited to 21 million coins, an inherent scarcity that proponents argue makes it an excellent hedge against inflation. Critics have long asserted that bitcoin possesses no intrinsic value; however, it has remarkably defied this judgment with significant price increases. Some advocates of a strategic bitcoin reserve believe it could one day assist in settling the U.S. national debt.
Following Trump’s victory last year, crypto prices surged, and when bitcoin first surpassed $100,000 in early December, Trump claimed credit with a post saying, “YOU’RE WELCOME!!!” on social media.
Nevertheless, prices have since stabilized. Trump’s executive order did not lead to an immediate price increase for bitcoin, which was trading around $86,000 shortly after the announcement.
The executive order also establishes a “U.S. Digital Asset Stockpile” for the government to hold cryptocurrencies other than bitcoin. On Sunday, Trump inadvertently triggered a temporary spike in crypto prices with an unexpected announcement that he wanted the government to hold lesser-known cryptocurrencies such as XRP, Solana, and Cardano.
