The United States is set to establish a “Strategic Bitcoin Reserve,” aligning with President Donald Trump’s support for the cryptocurrency industry as he aims to position the country as the “bitcoin and cryptocurrency capital of the world”.
Earlier this month, Trump signed an executive order creating the reserve, which White House crypto chief David Sacks has described as “adigital Fort Knox,” drawing parallels to the stockpiling of gold at the US military base.
Gold has long been held in reserves by nations worldwide, valued as a safe-haven asset during times of economic uncertainty. On Friday, the yellow metal surpassed $3,000 per ounce for the first time, driven by market jitters over Trump’s trade tariffs. Like gold, national reserves can help stabilise a country’s currency and act as collateral in financial transactions.

How will the US Bitcoin Reserve work?

The reserve will be backed by 200,000 bitcoins, worth an estimated $17 billion, seized in civil and criminal cases across the US. These holdings will be secured indefinitely, with additional bitcoin only added if it remains “budget-neutral”, ensuring no cost to taxpayers.

A lukewarm market response

Despite the bold move, the announcement failed to excite the market. Bitcoin’s price initially dipped after Trump signed the executive order, before stabilising. Analysts pointed to the government’s failure to immediately buy more bitcoin as a reason for the underwhelming reaction.
Dessislava Aubert, an analyst at crypto data firm Kaiko, told AFP that US authorities are legally required to return some of the seized bitcoin to victims of past hacks. A significant portion, nearly 198,000 bitcoins, could be returned to those affected by the 2016 Bitfinex exchange hack.
There’s also speculation about whether the reserve will expand to include other cryptocurrencies. Trump has suggested adding ether (ETH), XRP, Solana (SOL), and Cardano (ADA) to the mix, though no official decision has been made.

Is Bitcoin the new gold?

Critics argued that bitcoin is far riskier than gold, with no intrinsic value. Unlike gold, cryptocurrencies are highly volatile and prone to market speculation.
However, Sacks insisted that by holding bitcoin long-term, the government can shield itself from market swings and avoid sudden price crashes. Stephane Ifrah, investment director at Coinhouse also believed bitcoin’s fixed supply of 21 million tokens gives it a similar rarity appeal to gold.
One advantage of a bitcoin reserve is transparency as the number of tokens held by the government would be publicly visible at all times, unlike gold reserves at Fort Knox, where actual holdings remain largely undisclosed.
Despite these arguments, prominent crypto skeptic Molly White believed that the real motive behind the reserve is to boost interest in the crypto industry, ultimately benefiting investors.
Trump has made no secret of his ambition to make the US the “bitcoin and cryptocurrency capital of the world.” However, his direct involvement in the sector has raised conflict of interest concerns.
The Financial Times reported that Trump earned $350 million from launching a meme coin ($TRUMP) ahead of his inauguration. Meanwhile, the Wall Street Journal also made a revelation claiming the Trump family considered acquiring a stake in Binance, though the crypto exchange’s founder has denied these claims.

Other countries watching closely

The US is not alone in exploring a national crypto reserve. Brazil is reportedly considering a similar move, while Switzerland’s central bank has ruled it out. Governments worldwide continue to engage with digital assets, often selling seized cryptocurrencies, as seen in Germany’s sale of 50,000 bitcoins last year.
Some nations have even adopted bitcoin as legal tender, though not always successfully. El Salvador made bitcoin an official currency but later reversed the decision due to low adoption. Meanwhile, Bhutan quietly holds nearly $900 million in bitcoin, around 30 per cent of its GDP.