- Trump’s Strategic Bitcoin Reserve could eliminate $18 billion in sell-side pressure on BTC.
- Under the new policy, the U.S. government holds 198,109 BTC, valued at around $17 billion.
- After the announcement, BTC dropped 6% to $84,864, disappointing market expectations.
U.S. President Donald Trump has signed an executive order to establish a Strategic Bitcoin Reserve, aiming to retain confiscated Bitcoin rather than sell it. Coinbase executive Conor Grogan estimated that this move would remove approximately $18 billion in sell-side pressure, potentially significantly impacting Bitcoin’s market dynamics.
U.S. Government’s Bitcoin Holdings and Strategy
According to Arkham Intelligence, the U.S. government holds around 198,109 BTC, 122 million USDT, and 56,035 ETH. On Thursday, Trump signed an executive order to establish a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile, as White House AI and Crypto Czar David Sacks stated.
Sacks highlighted that the government had previously sold around 195,000 BTC for just $366 million over the last decade. The executive order mandates a full audit of the government’s BTC holdings and empowers the Treasury and Commerce Departments to explore budget-neutral strategies for acquiring additional BTC.
Trump’s stance on cryptocurrency has drastically shifted from skepticism to full support. Once dismissing Bitcoin as a potential scam, he embraces it, gaining backing from industry leaders frustrated with the previous administration’s regulatory stance. His campaign included promises such as promoting industry-friendly legislation and scaling back SEC enforcement actions against major crypto firms.
Bitcoin and Major Cryptos Face Declines After Announcement
Despite the significant policy shift, Bitcoin and other major cryptocurrencies declined following the announcement. BTC dropped 6% to $84,864.3, reflecting market disappointment over the lack of government-funded crypto purchases. Other major cryptocurrencies, including Ether, Solana, Cardano, and XRP, also experienced declines ranging from 3.7% to 14%.
Sacks clarified that the reserve will be funded solely by BTC seized in criminal and civil asset forfeiture cases. The Department of Justice holds around 200,000 BTC, valued at over $17 billion. Previously, these assets were periodically liquidated through Coinbase partnerships. However, future government sales have been halted under the new policy.
Market analysts speculate that while the reserve prevents further BTC sales, it does not create new demand, leading to limited immediate price benefits. The hope that Trump might push Congress to authorize direct BTC purchases remains unfulfilled. Consequently, Bitcoin dropped 4.6% in 24 hours, trading at $87,373 at the time of writing.
BTC remains the leading cryptocurrency, with a total market capitalization of approximately $1.7 trillion. Initially created in response to the 2008 financial crisis, BTC has evolved into a digital asset widely regarded as a hedge against inflation. Supporters argue that a strategic BTC reserve could strengthen the U.S. economy and contribute to debt reduction over time.
Read More: White House Confirms Bitcoin Reserve Plan Under Trump’s Order
