Trump's Bitcoin Reserve Order Removes $17 Billion Selling Pressure
1min read U.S. President Donald Trump recently signed an executive order to establish a strategic bitcoin reserve, which includes bitcoins seized by the U.S. government through law enforcement actions. The reserve will also include other coins forfeited in criminal or civil proceedings, with no taxpayer money spent on acquiring additional bitcoins or other coins. According to Arkham Intelligence, the U.S. government currently holds 198,000 bitcoins worth about $17.3 billion. This move essentially removes over $17 billion in selling pressure from the market.
Despite the strategic reserve announcement, bitcoin prices initially extended losses, hitting lows near $84,700. This reflected investor disappointment over the lack of new BTC purchases by the U.S. government. However, prices have since recovered to $87,600, with hopes that Trump will announce a favorable crypto tax policy at the upcoming White House crypto summit.
Market pundits have offered varied reactions to the strategic reserve announcement. Valentin Fournier, an analyst, noted that the executive order has disappointed some investors due to the lack of a clear acquisition plan, leading to a 4% daily decline in Bitcoin, Ethereum, and Solana. However, he also pointed out that Commerce Secretary Howard Lutnick's involvement could signal a hidden accumulation strategy by the U.S. government, potentially igniting a parabolic rally.
Dick Lo, CEO of a quant-driven digital assets trading firm, expressed initial disappointment but emphasized the positive aspects of the announcement. He highlighted that the news is unambiguously positive, as it distinguishes between Bitcoin and other cryptocurrencies, with no dollars spent on buying altcoins. He also suggested that further positive announcements could come from the Crypto Summit, including more favorable tax treatment towards crypto.
Andrew O’Neill, Digital Assets Managing Director, noted that the significance of the executive order is mainly symbolic, as it marks the first time bitcoin is formally recognized as a reserve asset of the U.S. government. The order commits to holding the BTC as a reserve asset without selling it and contemplates the possibility of acquiring additional bitcoin in a budget-neutral manner. However, there is no indication yet of how much, if any, would be acquired nor a timeline. The order also clearly distinguishes between bitcoin and other digital assets, which will not be included in the reserve but rather in a separate "stockpile."