On Thursday, President Donald Trump enacted an executive order to establish a government reserve for bitcoin, marking a significant step towards the cryptocurrency’s potential mainstream adoption.
According to Trump’s “crypto czar,” David Sacks, the new order mandates that the U.S. government retain the estimated 200,000 bitcoin already seized in various criminal and civil cases.
“The U.S. will not liquidate any bitcoin deposited in the Reserve. It will serve as a store of value. This Reserve is akin to a digital Fort Knox for what is often referred to as ‘digital gold,’” Sacks stated on social media.
The executive order requests a “full accounting” of the government’s bitcoin assets, which, according to Sacks, have never undergone a complete audit. He added that over the past decade, the U.S. government has sold roughly 195,000 bitcoin for $366 million, which would equate to about $17 billion if retained.
Sacks mentioned that the order allows the Treasury and Commerce Departments “to create budget-neutral strategies for acquiring more bitcoin.”
Once a skeptic who previously described bitcoin as “ appearing like a scam,” Trump has now adopted digital currencies, embracing his unofficial title as the “ crypto president.” This shift could benefit the crypto sector and potentially enrich him and his family. Major players in the crypto industry, feeling unfairly targeted by the Biden administration, invested significantly to support Trump’s re-election bid last year.
Establishing a bitcoin reserve was one of several crypto-related commitments Trump made during his campaign last year. He is also advocating for Congress to pass legislation that is friendly to the industry, and under his leadership, the Securities and Exchange Commission has begun to withdraw enforcement actions previously taken against several major crypto firms. On Friday, Trump plans to host key industry leaders at a White House “Crypto Summit.”
Bitcoin, the oldest and most well-known cryptocurrency, was created in response to the 2008 financial crisis by an anonymous entity. It has evolved from an experiment by libertarian cryptography enthusiasts into an asset with a market capitalization of approximately $1.7 trillion. Although not widely adopted for everyday transactions, bitcoin has gained traction as a store of value, independent of banks and governments.
The supply of bitcoin is capped at 21 million coins, creating a built-in scarcity that advocates believe makes it an excellent hedge against inflation. While critics argue that bitcoin lacks intrinsic value, it has consistently proven them wrong with impressive price surges. Some proponents of a strategic bitcoin reserve argue that it could one day contribute to paying down 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 took to social media to proclaim, “YOU’RE WELCOME!!!”
However, prices have since stabilized. Trump’s executive order did not result in an immediate spike in bitcoin’s value, as it was trading around $86,000 shortly after his announcement.
The executive order also initiates a “U.S. Digital Asset Stockpile,” wherein the government will retain seized cryptocurrencies aside from bitcoin. On Sunday, a surprise announcement from Trump regarding his desire for the government to hold lesser-known cryptocurrencies like XRP, Solana, and Cardano caused a brief surge in crypto prices.
