Trump Bitcoin Reserve Launch Sparks 7% Price Drop
1min read On March 7, US President Donald Trump signed an executive order establishing a Strategic Bitcoin Reserve (SBR) and a “Digital Asset Stockpile.” The SBR will be initially funded with cryptocurrency seized through government criminal and civil forfeiture proceedings, with future acquisitions possible under budget-neutral conditions. This move was met with a significant drop in Bitcoin’s price, falling from approximately $91,200 to about $84,667—a decline of over 7%. Many market participants expressed disappointment that the executive order did not immediately involve more aggressive Bitcoin purchases. However, key industry voices argue that the market may have misinterpreted the long-term implications of this strategic move.
David Sacks, the White House AI and crypto czar, announced the development via X, stating that the SBR will be capitalized with Bitcoin owned by the federal government, which was forfeited as part of criminal or civil asset forfeiture proceedings. This means that the initial capitalization will not cost taxpayers any money. Sacks clarified that the US government owns about 200,000 Bitcoin, although there has never been a complete audit. The executive order directs a full accounting of the federal government’s digital asset holdings. President Trump committed to not selling any Bitcoin deposited into the Reserve, stating that it will be kept as a store of value, likening it to a digital Fort Knox for the cryptocurrency often called ‘digital gold.’
Additionally, the Secretary of Treasury and Commerce, led by well-known Bitcoin bull Howard Lutnick, is authorized to develop budget-neutral strategies for acquiring more Bitcoin. Although specific methods remain unclear, this move could lead to further US government BTC accumulation. The executive order also establishes a US Digital Asset Stockpile, which will include seized digital assets other than BTC. This stockpile will not be actively expanded beyond whatever coins the government gains via forfeiture. Its purpose is to exercise “responsible stewardship of the government’s digital assets under the Treasury Department.”
Despite the price volatility, industry leaders struck an optimistic tone. David Bailey, CEO of BTC Inc, expressed excitement about the global response to the news, calling it “the shot heard around the world.” nic Carter, general partner at Castle Island Ventures, praised the announcement, noting that it keeps a campaign promise, distinguishes the Bitcoin Reserve from the altcoin Stockpile, and receives the official US government seal 