Strategic Bitcoin Reserve: The Debate Over Trump’s New Initiative
Donald Trump has made good on his promise by signing an executive order to establish the Strategic Bitcoin Reserve, a dedicated digital asset reserve for the United States.
While some industry figures have praised the order, others have been skeptical, arguing that it is merely a rebranding of existing holdings without actually delivering a new strategy.
Trump’s Executive Order on the Strategic Bitcoin Reserve
The order directs the U.S. Treasury to fund the Strategic Bitcoin Reserve through Bitcoin seized from criminal and civil cases. The administration has pledged not to sell the assets.
“Bitcoin, the original cryptocurrency, known as ‘digital gold’ for its scarcity and security, has never been hacked. With a fixed supply of 21 million coins, the United States has a strategic advantage by being one of the first countries to create a Strategic Bitcoin Reserve,” the executive order emphasizes.
According to data from Arkham Intelligence, the US government currently holds 198,109 BTC, worth approximately $17.5 billion at current market prices.
US Government Digital Asset Holdings
Despite the significant amount the government holds, David Sacks, the White House undersecretary for AI and cryptocurrency, noted that there has been no comprehensive audit of the government’s digital assets. The new order calls for such a mandatory audit.
He emphasized that the government lost more than $17 billion in value by selling Bitcoin prematurely. The new strategy will allow the government to optimize the value of its holdings.
The order also opens up the possibility for the government to purchase more Bitcoin through budget-neutral strategies. However, some critics say this will not have a major impact.
Controversy from industry experts
Jacob King, founder of WhaleWire, has taken issue with the recent attention paid to the strategic Bitcoin reserve. He said the initiative has been around for more than a decade, and is now just a name change to attract users.
King also pointed out that the reserve does not include any plans to purchase more Bitcoin. This, he said, makes the order unlikely to have a major impact on the market.
Peter Schiff, a prominent Bitcoin critic, said the order was put in place under pressure from donors and cabinet members with conflicting interests. He described it as a “bogus” attempt to capitalize on the government’s Bitcoin holdings.
However, some industry leaders see the order as an important step toward legalizing Bitcoin internationally. Ryan Rasmussen, head of research at Bitwise, said the move could prompt other countries to buy Bitcoin and put pressure on financial institutions to adopt the cryptocurrency.
Less Likelihood of Bitcoin Ban
Matt Hougan, CIO of Bitwise, said the order could reduce the risk of future Bitcoin bans and make it easier for US states to adopt the cryptocurrency. He said it was an opportunity other countries should seize before the US gains more purchasing power.
Nic Carter, an analyst, praised Trump’s decision, noting that Bitcoin has been officially recognized by the US government, something that many other cryptocurrencies have yet to achieve. Carter also noted that not using tax money to buy Bitcoin helped the order avoid strong criticism.
Market Reaction
The signing of the executive order came just ahead of the White House Crypto Summit. While it was expected to boost Bitcoin prices, it has instead led to a decline in the value of the cryptocurrency. After reaching $90,000 on March 5, Bitcoin has fallen back below $90,000 and is currently trading at $87,469, down 4.5% over the past 24 hours.
Despite the controversy, Trump’s new Strategic Bitcoin Reserve order is still a noteworthy event, with the potential to have a major impact on both the cryptocurrency market and global financial policy.
