I'm quite sure by now that many people in the cryptosphere will know that yesterday afternoon the US President Donald Trump signed an executive order finally establishing a crypto reserve fund, in fact he established two - the Bitcoin Strategic Reserve and the Digital Asset Stockpile. This is the latest extraordinary development that, in my opinion, confirms Trump and his administration is serious about Bitcoin and crypto adoption.
To think that when Bitcoin was launched back in 2009 it was worth so little, less than one cent, and now here we are in 2025 with Bitcoin currently trading around $86,000 and the president of the biggest economy in the world now making Bitcoin and other cryptos part of a global reserve asset is quite frankly mind blowing.
(President Donald Trump yesterday in the Oval Office signing an executive order establishing a Bitcoin Strategic Reserve)
Interestingly, the foundations for the Bitcoin Strategic Reserve will be built from seizing Bitcoin assets from criminal activities, once seized they transfer into sole ownership of the US government. I was discussing the speculation of this reserve fund in the last Crypto & Cola Show and I had assumed that should the reserve be set up the US government would then buy a stack of Bitcoin and expect to see a return on their investment and perhaps start to pay off some US debt. This would have been my preferred option as hopefully we would have seen the crypto markets climb in price.
However, now that we have more details it's actually a clever move in a way to start building this fund with seized Bitcoin assets, why buy when you can have free, right? However, I would imagine that at some stage the US Treasury will start to accumulate more Bitcoin for this fund, either through purchasing directly from the market or other means, despite what they may say at the moment.
(Current US Government Bitcoin holding)
As of now the US government owns 198,109 Bitcoins with a current value of around $17.9bn, all of which has been accumulated through seizures and forfeitures involving criminal and civil cases. However, only a part of this figure will end up in the Bitcoin Strategic Reserve, but it's a significant start.
Encouragingly the US government Crypto Tsar David Sacks said yesterday that the US government will not be selling any of the Bitcoins held in the reserve fund, stating it will be held for store of value purposes only. It will be interesting to see if other government departments eventually seed some of their seized Bitcoin holdings and put it into the fund.
In relation to the Digital Asset Stockpile, Sacks stated that the government would not be seeking to buy any additional cryptocurrencies to capitalise this fund, and again stated it would be funded through crypto assets seized from criminal activity.
At this stage it appears that both of these crypto reserve funds are going to be capitalised purely through seizure and forfeiture. However, given what we know about governments and money I can imagine that somewhere down the line they may decide to add further funds to the reserves through other means including purchasing and investing. We shall have to wait and see.
Either way this is a significant juncture for Bitcoin and crypto, should we be happy? Should we welcome this development? Let me know.
Peace!