On Thursday (US time), President Donald Trump made a significant advancement towards the mainstream acceptance of cryptocurrency by signing an executive order that establishes a government-held Bitcoin reserve. Following this pivotal decision, the price of Bitcoin experienced a decline of up to 5.7 percent.
As of 0100 GMT, Bitcoin’s value had decreased to $84,707, after David Sacks, the White House advisor on artificial intelligence and cryptocurrency, announced: “The Reserve will be funded with Bitcoin that the federal government has acquired through criminal or civil asset forfeiture. This initiative will not impose any financial burden on taxpayers.” The individual designated as Trump’s “crypto czar” praised the executive order, stating, “President Trump committed to the creation of a Strategic Bitcoin Reserve and Digital Asset Stockpile. Those commitments have been fulfilled.” He further noted that the US government will retain nearly 200,000 bitcoins that were confiscated during criminal and civil proceedings.
Sacks stated, “The United States will not liquidate any bitcoin held in the Reserve. It will serve as a store of value. The Reserve functions similarly to a digital Fort Knox for the cryptocurrency often referred to as ‘digital gold.’” The directive requires a comprehensive accounting of the government’s bitcoin assets, which the appointed official asserts were never adequately audited. He also disclosed that over the last decade, the nation has sold nearly 195,000 bitcoins for a mere $366 million, a sum that would now be valued at approximately $17 billion had those bitcoins not been sold. Additionally, the order permits the treasury and commerce departments to investigate budget-neutral methods for acquiring more bitcoin. Trump’s perspective on digital gold has undergone a significant shift; he previously characterized bitcoin as a “scam,” but has now emerged as a prominent political supporter of the industry. His administration has actively reversed regulatory restrictions and he has called on Congress to enact legislation favorable to cryptocurrencies. On Friday, he is scheduled to convene industry leaders at the White House for a “Crypto Summit.”
The order also established a distinct “US Digital Asset Stockpile” designated for the custody of seized cryptocurrencies beyond bitcoin. On Sunday, Trump briefly influenced the market by expressing an unexpected interest in the government’s possession of lesser-known cryptocurrencies such as XRP, Solana, and Cardano. Bitcoin, recognized as the first and largest cryptocurrency, was developed in response to the financial crisis of 2008 by an anonymous entity or group known as Satoshi Nakamoto. Although it has not yet achieved widespread acceptance as a payment method, its capped supply of 21 million coins has led many to view it as a potential safeguard against inflation. Some proponents argue that a strategic reserve of bitcoin could even assist in addressing the US national debt in the future. Following Trump’s electoral victory, the cryptocurrency markets experienced a surge, particularly when bitcoin initially surpassed the $100,000 mark; however, prices have since stabilized.
