Trump’s Strategic Bitcoin Reserve Could Alleviate $18 Billion in Selling Pressure

Coinbase’s Head of Product, Conor Grogan, said that Trump’s Strategic Bitcoin Reserve has alleviated the pressure that would arise from a large-scale government liquidation.

According to Arkham Intelligence data, the American authorities currently hold around 198,109 BTC, valued at approximately $18 billion at current market prices.

The order also calls for a detailed accounting of the federal government’s digital asset holdings. Given the mess in the US, this could be a lot of work.

On Thursday evening, Trump’s AI and crypto tsar, David Sacks, announced that the President signed an executive order directing the creation of a Strategic Bitcoin Reserve. The reserve will be funded using Bitcoin obtained through criminal and civil asset forfeitures.

Trump and Bitcoin!

Under the executive order, the 198,109 BTC from the Silk Road seizure will be held as a long-term store of value, effectively a digital Fort Knox, with no planned sales.

It’s particularly important since many suggest that the U.S. government had occasionally sold parts of their Bitcoin holdings. Arkham Intelligence data shows that the government moved billions worth of Bitcoin in 2024, with the most recent transfer made in December, though it’s still speculative whether these transactions were for sale purposes.

According to David Sacks, the U.S. government has sold 195,000 BTC in the past decade, generating $366 million in profits. However, he criticized this approach, stating that if the government had held onto Bitcoin instead of selling it prematurely, its value would now exceed $17 billion.

The newly signed order aims to safeguard against this happening again, at least for the next four years. Rather than liquidating seized Bitcoin, the government aims to benefit from its long-term value.

The order also calls for a detailed accounting of the federal government’s digital asset holdings. The Treasury and Commerce Departments are tasked with developing strategies to acquire additional Bitcoin without adding taxpayer costs.

Senator Cynthia Lummis, a known Bitcoin advocate, said that Trump’s executive order was just the beginning. She previously introduced the BITCOIN Act, which proposes the acquisition of 1 million Bitcoin over five years as part of a strategic reserve to strengthen the U.S. balance sheet.

The bill was effectively considered “dead” in the previous Congress. By the end of the 118th Congress, the bill had not advanced, and its prospects were deemed unlikely at that time.

However, with the November 2024 elections resulting in a Republican-controlled Congress and a more crypto-friendly legislative environment, there is renewed momentum for such proposals. Lummis may soon reintroduce the bill or unveil a new bill with a similar goal to bring the proposal back into focus.

Lummis is focused on bipartisan efforts to pass comprehensive digital asset legislation, including stablecoin regulation and market structure reforms, through her role as Chair of the Senate Digital Asset Subcommittee.

Digital Asset Stockpile

Apart from the Strategic Bitcoin Reserve, Trump’s new order also mandated the establishment of a U.S. Digital Asset Stockpile, a separate initiative that will hold non-Bitcoin digital assets like Ethereum, XRP, and Solana obtained through forfeiture cases.

Unlike the Bitcoin reserve, the government won’t actively acquire additional crypto assets beyond those seized. The Treasury Secretary maintains authority to sell these assets when necessary.

All agencies must report all digital assets they hold to the Treasury and the President’s Working Group on Digital Asset Markets for oversight.

Last week, Trump said that the American crypto stockpile would hold XRP, SOL, and ADA. However, it’s unclear how the idea could have materialized since the government did not seize any of the mentioned cryptocurrencies, and thus did not hold any.

Of $17,73 billion in crypto assets seized in the Silk Road case, the U.S. government holds around $40 million in multiple cryptocurrencies, such as ETH, WBTC, and BNB.