Trump’s Executive Order on Cryptocurrency Reserves Sparks Mixed Reactions

By Annabelle Liang & Liv McMahon
Business & Technology Reporters

In a move that has raised eyebrows within the cryptocurrency industry, President Donald Trump has signed an executive order establishing official government cryptocurrency reserves in the United States. The newly created Strategic Bitcoin Reserve and Digital Asset Stockpile aim to consolidate various forms of digital currency, including Bitcoin and other cryptocurrencies, as part of the federal government’s assets.

What the Executive Order Entails

According to the executive order, the reserves will primarily consist of cryptocurrencies forfeited to the federal government through criminal or civil proceedings. White House AI and cryptocurrency advisor David Sacks likened the initiative to "a digital Fort Knox," drawing a comparison to the famed Kentucky military base that securely stores a significant portion of U.S. gold assets.

During a press briefing ahead of a special crypto summit scheduled for Friday, Sacks revealed that the government currently holds approximately 200,000 Bitcoin, valued at $17.5 billion at current market rates. He expressed regret over the lost opportunities to maximize value for American taxpayers, stating, "What we want to do is make sure that with the remaining Bitcoin that we have."

Criticism and Support from Industry Experts

While some cryptocurrency enthusiasts see potential in the strategic reserve, others have criticized the administration for not being more aggressive in its approach. Charles Edwards, from the Capriole Fund, responded to Sacks’ announcement by calling it “a pig in lipstick,” arguing that the plan does not involve any new acquisition of Bitcoin, merely repackaging existing holdings.

Trump’s executive order also stipulates that the Treasury and Commerce Secretaries must devise strategies for acquiring more government Bitcoin, provided these strategies are “budget neutral” and do not impose additional costs on taxpayers. According to Sacks, this means any purchases must not increase the federal deficit or debt.

Jason Yanowitz, co-founder of Blockworks, expressed concerns about the inclusion of multiple cryptocurrencies in the stockpile, warning that it sets a “horrible precedent” and could lead to arbitrary asset selections, which may distort market dynamics and public trust. Conversely, investment director Russ Mould at AJ Bell viewed the initiative positively, stating, “This approach makes much more sense than buying the assets,” asserting that it is rare for the United States, the world’s reserve currency holder, to sell dollars to invest in cryptocurrencies.

What’s Next for the Cryptocurrency Reserve

As details of the reserves unfold, questions remain regarding their potential benefits for the American public. Sacks assured reporters that the initiative "will not cost taxpayers a dime." However, it is unclear whether the proposed reserve might encounter legal hurdles or require congressional approval.

Sacks confirmed that the U.S. government does not intend to sell any Bitcoin deposited in the reserve, emphasizing that these assets will be kept for potential future use. Instead, other cryptocurrencies will be handled through a separate stockpile. Following Sacks’ comments, Bitcoin prices dropped over 5%, reflecting market uncertainty surrounding the government’s intentions.

In a related development earlier in the week, Trump disclosed five cryptocurrencies he hopes to include in the strategic reserve. The announcement briefly boosted the market prices of Bitcoin, Ethereum, XRP, Solana, and Cardano.

The Importance of Transparency

Yanowitz concluded that the government must be cautious in its approach to avoid the perception of favoritism. "Ensuring transparency through independent audits and public reporting is crucial for fostering innovation instead of favouritism," he stated. To ensure accountability, Sacks mentioned that each government department, including intelligence agencies, will be required to audit and report their cryptocurrency holdings, with no exceptions allowed.

This executive order comes at a time when Trump’s relationship with the crypto community had previously been characterized by outreach during his presidential campaign. In contrast, the Biden administration has implemented a stricter regulatory environment due to concerns about fraud and market volatility.

As the crypto summit approaches, further clarity on the administration’s cryptocurrency strategy is expected, but the implications of this reserve for both the industry and American taxpayers remain to be fully understood.