New York
CNN
—
Former President Donald Trump has initiated a Strategic Bitcoin Reserve through an executive order, as revealed in an X post by David Sacks, the White House coordinator for AI and cryptocurrency.
Trump announced on social media last Sunday his intention to instruct the government to accumulate bitcoin, ethereum, and three additional cryptocurrencies, which resulted in criticism from the crypto sector.
Sacks indicated that the reserve would be “funded by Bitcoin seized by the federal government from criminal or civil asset forfeiture proceedings.” He emphasized that this structure would prevent any costs to taxpayers.
Moreover, the executive order aims to mandate a comprehensive assessment of the government’s digital asset holdings, with Sacks estimating around 200,000 bitcoins. He noted that the government will not liquidate any bitcoins from the reserve, likening it to a “digital Fort Knox.”
The executive order also established a US Digital Asset Stockpile, with Sacks stating that its mission is to ensure responsible management of the government’s digital assets within the Treasury Department.
The cryptocurrency industry has been granted an unprecedented level of access in Trump’s administration, in stark contrast to the more stringent stance adopted by former President Joe Biden and his team. For instance, the White House is set to host its inaugural crypto summit this Friday.
Reflecting the broader market trends, the cryptocurrency market has experienced volatility as Trump’s economic measures are implemented, including fluctuating tariffs that have added instability to the global economy. In such instances, investors tend to withdraw from high-risk assets like cryptocurrency.
Critics of cryptocurrency argue that its value is artificially supported and question the necessity of a reserve for these digital assets.
“The moment you begin to sell, the value is likely to plummet,” remarked Hilary Allen, a law professor at American University and noted crypto skeptic, previously commenting to CNN. “It underscores how futile the initiative is if the goal is anything other than providing liquidity for current holders.”
In his Sunday announcement on Truth Social, Trump specified that alongside Bitcoin and ethereum, lesser-known tokens like Solana, XRP, and Cardano would also be included in the stockpile.
Sacks also addressed social media allegations regarding a potential conflict of interest due to his investments in cryptocurrencies. He stated that he had divested from all crypto assets prior to Trump taking office and would “provide an update at the end of the ethics process.”
“There may still be unexpected developments arising from the historic summit on Friday, and the market will continue to react to recent subpar employment data released today, along with other macroeconomic factors,” noted Gerald Gallagher, general counsel for Sei Labs. “Nonetheless, the industry leaders participating should be able to guide policy in a favorable direction, and we need to maintain our momentum with regulators and the judiciary, supported by this administration.”
This is an evolving story and will receive updates.
