Trump Signs Executive Order on Bitcoin Reserves But Will Not Buy More

President Donald Trump signed an executive order on March 6 establishing the Strategic Bitcoin Reserve Fund and Digital Asset Reserve as well as directing the federal government to hold seized cryptocurrencies as a long-term store of value. Under this order, the Ministry of Finance will oversee the management of both reserves, but the government will not actively buy more assets beyond the assets already seized. This order also specifies that Minister of Finance Scott Bessent and Minister of Commerce Howard Lutnick will be tasked with developing neutral budget strategies to expand the country's Bitcoin holdings without incurring additional tax costs. However, the announcement does not provide additional detailed information or a timeline for when these holdings will be expanded. The market reacted negatively to the disclosure that the government will not immediately buy more Bitcoin to reserve. The lack of immediate accumulation strategy has dampened market enthusiasm. Based on CryptoSlate's data, Bitcoin has dropped more than 5% within a few minutes to a low of $85,000 before attempting to prevent further decline. The leading cryptocurrency is trading at $86,000 at the time of reporting. The market in general also evolves similarly, with major alternative coins dropping 6% across the board. Order of Execution This order requires Bitcoin to be seized through civil and criminal asset forfeiture procedures and placed into a reserve fund, ensuring no additional costs to the taxpayer. Meanwhile, the Digital Asset Stockpile, a separate group, will hold various types of cryptocurrencies other than BTC also obtained through confiscation. This order also calls for a comprehensive audit of the government's holdings of digital assets, with estimates showing the US owns approximately 200,000 BTC. The new policy prevents the government from selling any Bitcoin in its reserves, likening it to a digital version of Fort Knox. Supporters of this move believe it could prevent past mistakes, citing cases where selling Bitcoin early led to the loss of billions in potential value. This move aligns with Trump's broader effort to make the United States the global leader in digital assets. David Sacks, a key supporter within the administration, praised this decision, calling it the fulfillment of Trump's campaign promise to support cryptocurrency innovation. While the executive order signals a shift in the federal digital asset policy, there are still many questions about its long-term impact. Some analysts warn that maintaining a Bitcoin reserve without proactive management could expose the government to market volatility. In addition, barriers related to regulations and parliamentary oversight may further impact the development of this initiative. This order underscores the government's accelerated efforts to integrate digital assets into the national financial strategy, with officials calling it a step towards strengthening the US's position as a "crypto capital".