President Donald Trump’s signing of an executive order on Thursday establishing a reserve of Bitcoin for the United States is a significant step toward bringing crypto into the mainstream.
The signing was expected, given his support for cryptocurrency even during his campaigns. Earlier this month, the president expressed special interest in ETH, BTC, SOL, XRP, and ADA, promising to make the U.S. the crypto capital of the world.
So, with the signing of this executive order establishing a government Bitcoin reserve, what should crypto enthusiasts expect in the days ahead? Will the U.S. be buying Bitcoin directly every week or monthly?
Here’s how the U.S. Bitcoin reserve will work, according to Trump’s crypto right-hand man, David Sacks:
Source of the Reserve: The country will not use taxpayers’ money to acquire Bitcoin. Instead, the Trump administration will rely on seized assets as part of criminal or civil asset forfeiture proceedings. This means that under the new order, the government will retain an estimated 200,000 Bitcoin that it has already seized in criminal and civil proceedings.
Accountability and Transparency: The 200,000 BTC owned by the government have never been fully audited. This means Trump’s executive order directs a complete accounting of government cryptocurrency assets.
The Reserve Will Serve as a Digital Fort Knox: Contrary to the expectations of some Bitcoin holders who were hoping to profit from the new crypto policy, the government will not be engaging in such sales. Sacks says, “The U.S. will not sell any Bitcoin deposited into the Reserve.”
This means that the reserve will only serve as a store of value, similar to a digital Fort Knox for the cryptocurrency often referred to as “digital gold.”
Maximizing Value: This strategy will help the government maximize the value of its Bitcoin holdings. There will be no premature sales. The reserve is intended for the long-term.
Strategy to Acquire More Coins: The Secretaries of Treasury and Commerce, Scott Bessent and Howard Lutnick, have been authorized by the order to develop budget-neutral strategies for acquiring additional Bitcoin that will not impact American taxpayers.
Any Impact on Bitcoin Price After the Signing?
Unlike when Trump announced his ‘love’ for a few digital assets earlier in the month, which caused a slight spike in the price of BTC, ETH, ADA, SOL, and XRP before it settled, the latest executive order didn’t directly impact the cryptocurrency market.
For instance, BTC maintained the $88K – $89,043.88 range at the time of publication. Things may have changed if Trump had announced the purchase of some coins.
Bitcoin began as an experiment in 2008, with some pessimists describing it as a scam, but the coin has proven critics wrong. Its value has grown from nothing to become the most valuable digital asset in the world. It currently has a $1.7 trillion market capitalization.