Author: Spirit, Golden Finance
Trump signed an executive order at 8:00 a.m. Beijing time on March 7, 2024 to establish a strategic Bitcoin reserve and digital asset reserve, marking the official inclusion of Bitcoin in the national strategic asset system by the United States. This historic move not only gives Bitcoin national strategic significance, but also triggers extensive discussions on global crypto market volatility and geopolitical competition.
I. Policy Background and Significance
The executive order signed by Trump positions Bitcoin as a national strategic asset, aiming to consolidate the United States' financial dominance in the digital currency era and seize the opportunity to formulate global crypto asset rules. Against the backdrop of the dominance of the US dollar facing the challenge of de-dollarization and the national debt exceeding US$34 trillion, the scarcity of Bitcoin is seen as a modern tool to hedge against inflation and debt crises, similar to "digital gold". This move not only enhances the legitimacy of Bitcoin, but may also push the global regulatory framework toward the United States and attract more institutional investors to enter the market.
II. The operating mechanism of the Strategic Bitcoin Reserve and the Digital Asset Reserve
According to David Sacks, the director of AI and cryptocurrency at the White House, the core mechanism of this policy is as follows:
Strategic Bitcoin Reserve:
Initial scale: Based on the approximately 198,000 bitcoins held by the US government (derived from criminal and civil forfeiture procedures), the total value is approximately US$17.3 billion at the current price ($87,700 per bitcoin).
How it works: The government is authorized to explore ways to acquire more bitcoins without increasing the burden on taxpayers, but it is clear that it will not actively purchase them. The executive order requires a full audit of holdings and stipulates that bitcoins cannot be sold as a means of storing value, thereby reducing potential selling pressure by approximately US$18 billion (estimated by Conor Grogan, head of Coinbase).
Mechanism features:
Does not rely on fiscal appropriations and avoids direct market intervention.
Emphasis on "responsible management", reduces market selling pressure through long-term holding, and strengthens Bitcoin's value storage status.
III. Impact of the policy on the market and the global landscape
Market impact
Short-term volatility: A few days before the policy was announced, the market experienced a FOMO effect, and the price of Bitcoin once soared to $95,000, but fell back to $84,667 after the details were released this morning, reflecting investors' disappointment with the limited scope of the policy (only confiscation of assets, no large-scale purchases).
Long-term positives: Bitwise Chief Investment Officer Matt Hougan pointed out that government holdings reduce selling pressure and give Bitcoin a national endorsement, which is "extremely beneficial" to its long-term value. Local mining (such as Riot Blockchain) and custodians (such as Coinbase) may work closely with the government to reconstruct the industrial chain.
Global competition pattern
Geostrategic signal: The US move may stimulate other countries to follow suit, forming a competitive landscape for Bitcoin reserves. For example, China may hold Bitcoin indirectly through Hong Kong, Russia may use it to bypass SWIFT sanctions, and small countries such as El Salvador may use it as a sovereign asset.
Financial strategy adjustment: Against the backdrop of increasing global economic uncertainty, Bitcoin may become part of a "mixed reserve system" (coexistence of gold, US dollars, and Bitcoin).
IV. Latest Cryptocurrency Price Changes and Market Analysis
As of March 7, 2025, after the release of Trump's executive order, the crypto asset market has experienced significant fluctuations and has shown a downward trend in the short term. The following are the latest data:
Bitcoin (BTC)
Price: Down about 3% in 2 hours to about $87,000 per coin
Reason: The market is disappointed that the government has not purchased Bitcoin on a large scale, and macro pressures (such as the Fed's hawkish policy) have led to capital outflows from high-risk assets.
Ethereum (ETH)
Price: Down 4% in 2 hours to about $2,160.
Other Crypto Assets (Altcoins)
Trend: Some altcoins have fallen by up to 60% from their 2025 highs. The market is characterized by "heavy differentiation". Bitcoin is relatively stable, while altcoins are under significant pressure.
Forecast: This trend is expected to continue until mid-March or mid-April 2025, when retail investors' exits and whale accumulation may trigger a new round of upward momentum.
Market Analysis:
Policy Limitations: Only confiscated assets were used, and no new funds were injected, which failed to fully boost market confidence.
Macro Environment: The Fed's tightening monetary policy and Trump's tariff policy have exacerbated risk aversion.
Expert opinion: James Butterfill, head of research at CoinShares, believes that the market is disappointed with the policy details; Arthur Hayes, co-founder of BitMEX, warned that if the US dollar liquidity tightens in the second quarter of 2025, the market may adjust further.
V. Bitcoin arms race: local competition has begun, and the full-scale cold war awaits conditions
Trump's executive order has pushed the United States to the forefront of global crypto asset competition. Local competition is inevitable, but whether it will evolve into a full-scale "crypto cold war" remains to be seen.
Signs of local competition
China: May hold Bitcoin indirectly through Hong Kong.
Russia: Use Bitcoin to bypass sanctions and diversify reserves.
Small countries: Follow El Salvador and include Bitcoin in sovereign assets.
In the short term, the establishment of Bitcoin reserves by the United States will force some countries (especially resource exporters and financially vulnerable countries) to follow suit, forming a "digital gold" reserve competition. However, a full-scale arms race requires three conditions:
The technical stability of Bitcoin passes the national stress test;
Major economies reach a minimum regulatory consensus;
The traditional legal currency system has an irreversible collapse of trust (such as hyperinflation of the US dollar).
In the next 5-10 years, it is more likely to present a "hybrid reserve system": countries will dynamically balance between gold, US dollars, Bitcoin, and CBDC, and the role of Bitcoin is similar to a "crisis hedging option" rather than a mainstream reserve asset. However, if the global order accelerates fragmentation, the cryptocurrency arms race will become the new normal.
Summary
The executive order signed by Trump has given Bitcoin national strategic significance through a zero-cost operating mechanism, with clear long-term benefits that may reshape the global financial and competitive landscape. However, in the short term, the market fell due to limited policy details and macroeconomic pressures, with Bitcoin prices falling back to $87,700 and altcoins falling even more. Partial signs of a Bitcoin arms race have emerged, but a full-scale launch requires cooperation from more countries and market stability support. Investors should pay attention to the potential upward momentum from mid-March to April 2025, while being wary of the complex impacts of changes in the global landscape.
Anais
Weatherly
Alex
Catherine
Kikyo