Comment It’s official: President Donald Trump signed an executive order Thursday to create a US Bitcoin reserve and stockpile of related digital assets, though instead of boosting the value of the coins, the market reacted negatively to the news.

Bitcoin, Ethereum, and other crypto tumbled, and recovered somewhat, as people processed the announcement. It should be noted the markets in general in the United States are down at the moment due in large part to the White House flip-flopping on import tariffs against America’s neighbors and allies. It’s therefore not just unhappiness with the President’s approach to Uncle Sam holding digital assets that’s driving down the value of cryptocurrencies.

Trump’s executive order boils down to this: The Treasury Department has been ordered to establish two funds, a Strategic Bitcoin Reserve and a Digital Asset Stockpile. Both are being populated with cryptocurrencies that the federal government already holds that were seized as part of criminal or civil asset forfeiture or as part of a monetary penalty, with the stockpile being filled with everything aside from Bitcoin. 

Federal agencies in possession of BTC and other coins have 30 days to hand it all over to the Treasury. The Treasury, in turn, has to put all of its crypto holdings into the reserve or stockpile, except where officials have a reason to hang onto it to repay crime victims, settle debts, or pay for services. Interestingly enough, it’s reported the US Marshals Service, for one, has lost track of exactly how much cryptocurrency it has – among other things, the service manages assets seized by the Feds – complicating this whole process, if true.

The Bitcoin in the reserve “shall not be sold and shall be maintained as reserve assets of the United States,” the President’s order reads. While the same doesn’t apply to the stockpile, that means all the Bitcoin headed for the reserve is officially out of the market, potentially helping nudge the price up of all Bitcoin as there’s less of it in circulation. On the other hand, the coins aren’t being used in transactions and commerce.

“From a general economic perspective, if the assets are locked up in a digital vault they just sit there, and it doesn’t matter much if they appreciate in value,” Martha Bennett, Forrester VP principal analyst covering blockchain, web3, and digital assets, told The Register in a phone conversation.

If the assets are locked up in a digital vault they just sit there, and it doesn’t matter much if they appreciate in value

According to White House crypto and AI czar David Sacks, the US government has around 200,000 BTC acquired through forfeitures, worth approximately $18 billion as of writing. Exactly which other cryptocurrencies are destined for the stockpile has not been disclosed, and Bennett pointed out most forfeitures have been in Bitcoin.

The President earlier indicated Ripple (XRP), Solana (SOL) and Cardano’s ADA would be included, though when a White House official clarified today Trump had only listed off possibilities rather than commitments, prices of all three tokens plummeted.

When asked whether Trump’s order leaves the United States as a Bitcoin bagholder with a pile of assets that could be turned into cash or exchanged for other tokens, but won’t be, Bennett had to admit it was a distinct possibility. 

“Looking at it in the cold light of day, that argument makes a lot of sense,” Bennett opined. 

Crypto critic Molly White told us via email the executive order makes it pretty clear that practical arguments for the establishment of a Bitcoin reserve have been rendered moot by the order itself.

“They’ve yet to establish any clear argument for why such a reserve is beneficial to the country,” White said. “Attempts by some politicians (eg, Lummis, saying it could be used to pay off the national debt if Bitcoin appreciates) have been explicitly contradicted by the point in the executive order that the US won’t sell the tokens.”

Strike one for a happy crypto industry. 

No buying, no market boost

The other major sticking point in Trump’s proclamation, and likely the one that made the crypto world unhappy with his announcement, is the fact that it only allows for the reserve and stockpile to grow in one of two cases: Either through additional forfeited assets, or in the case of the reserve, through purchases of Bitcoin that “are budget neutral and do not impose incremental cost on US taxpayers.” 

The order makes no carveout for buying non-Bitcoin crypto assets.

White thinks most of the dissatisfaction among the digital asset crowd this week over the order has come from the realization that Trump isn’t going to be “pumping their bags by buying a bunch more crypto,” a point on which Bennett agrees. Remember, this is the same President that pumped meme coins about himself and his wife just as he was returning to power in January.

“A lot of people had gotten very excited about the prospect of the Trump administration creating something more akin to what RFK Jr described — a ‘strategic reserve’ established by going out and buying massive amounts of Bitcoin,” White said, referring to newly installed Health Secretary Robert F. Kennedy Jr.

“There’s still some room for new acquisitions, [but] it’s still vague, and the ‘budget neutrality’ caveats certainly don’t make purchases of that size look terribly likely.”

Bennett, likewise, told us the crypto community was hoping that the stockpile would involve buying lots of cryptocurrencies and pushing up the price – something that wouldn’t just please those who want to see the price rise, but fulfill the hopes of speculators, too. 

“There is a whole speculative industry around cryptocurrency,” Bennett said, referring to futures and other bets that people have made on Bitcoin and other coins. Those bets, Bennett pointed out, “are not going to happen since there’s no buying.” 

As for how a “budget neutral” purchase of Bitcoin might work out, Bennett said the only thing she can think of, given it’s the Treasury running the whole show, is if there’s a budget surplus at the Federal Reserve, which is supposed to be handed back over to the Treasury every year. 

“Currently the Fed doesn’t return any money to the treasury, so [that avenue is] hypothetical,” Bennett said. 

Strike two for crypto hopefuls, then. 

Additionally, said White, cryptocurrency holders and traders are worried the executive order will give the government further reason to crack down on them.

“Some are (reasonably) pointing out that this serves as a twisted incentive for the government to seize more Bitcoin and crypto assets to pocket it,” White said.

“They’ve tried to stave off complaints from the non-crypto world that the administration is just taking citizens’ money and funneling it into the pockets of crypto holders, but all of the vagueness about the specifics of the reserve until now have resulted in that perception regardless.” 

And there’s your third strike. 

As of writing, BTC has slipped nearly three percent in the past 24 hours, and is down more than seven percent over the past five days, and 10 percent for the month. On the other hand, it is up more than 60 percent over the past six months. and 30 percent for the year. ®