U.S. President Donald Trump signed an executive order Thursday establishing a strategic Bitcoin reserve. The order specifically designates that no new taxpayer funds will be used for acquisitions.
The reserve will consist of approximately 198,000 Bitcoins already in government possession through law enforcement seizures. This cache is currently valued at around $17.3 billion, according to Arkham Intelligence.
White House cryptocurrency and artificial intelligence czar David Sacks confirmed on social media platform X that the stockpile will include Bitcoin and other digital assets forfeited through criminal or civil proceedings. He emphasized that no taxpayer money would fund acquisitions.
Bitcoin prices initially fell following the announcement, dropping to near $84,700. The decline reflected investor disappointment that the plan didn't include provisions for new government purchases. Prices later recovered to $87,600 as traders anticipated potential favorable tax policy announcements at Friday's White House cryptocurrency summit.
Market analysts offered varied perspectives on the executive order's implications. "The significance of this executive order is mainly symbolic, as it marks the first time bitcoin is formally recognized as a reserve asset of the United States government," said Andrew O'Neill, Digital Assets Managing Director at S&P Global Ratings.
Valentin Fournier, analyst at BRN, noted market disappointment with the plan's limitations. "The Executive Order has disappointed some investors, as it explicitly states that the government will not acquire additional assets beyond those obtained through forfeitures," Fournier said. This uncertainty contributed to a 4% daily decline across major cryptocurrencies.
The order authorizes Commerce Secretary Howard Lutnick to develop a "budget-neutral" strategy for potentially acquiring additional bitcoin. Lutnick's connections to Bitcoin through MicroStrategy have prompted speculation about future government accumulation strategies.
Jeff Anderson, head of Asia at STS Digital, observed in a Telegram message that "Market is re-pricing tail risk now that the U.S. won't be actively buying BTC." He noted that bitcoin's 30-day implied volatility index dropped six points following the announcement.
TDX Strategies CEO Dick Lo characterized the news as "unambiguously positive" despite initial market disappointment. Lo highlighted the distinction between Bitcoin and other cryptocurrencies in the order, noting that "not a single dollar will be spent buying altcoins."
Disclaimer: The information provided in this article is for educational purposes only and should not be considered financial or legal advice. Always conduct your own research or consult a professional when dealing with cryptocurrency assets.