The United States has entered the era of Bitcoin reserves. Can the White House release more policy signals?

Written by: Yangz, Techub News

On March 7, US President Trump signed an executive order to establish a strategic reserve of Bitcoin and a US digital asset reserve, fulfilling his promise made at the Nashville Bitcoin Conference before taking office.

Among them, the initial funds for the Bitcoin strategic reserve come from the Bitcoin confiscated by the US government through criminal and civil lawsuits over the years (David Sacks, head of the White House's artificial intelligence and encryption affairs, said that without a complete audit, the US government currently owns about 200,000 Bitcoins, and the executive order requires a comprehensive accounting of the federal government's digital asset holdings; Arkham data shows that the current US government owns about 198,109 Bitcoins, worth about 17.38 billion US dollars), and authorized Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick to explore budget-neutral strategies to obtain more Bitcoin without increasing the burden on taxpayers; the US digital asset reserves include digital assets other than Bitcoin confiscated in criminal or civil lawsuits, which are managed by the Treasury Department.

The executive order states, "Within 30 days of the date of this order, agencies shall review their authority to transfer any government bitcoins they hold to the Bitcoin Strategic Reserve and submit a report to the Secretary of the Treasury. Government bitcoins deposited in the Bitcoin Strategic Reserve shall not be sold and shall be used as a reserve asset of the United States to achieve government objectives in accordance with applicable law." (The same applies to the digital asset reserve)

The battle between good and bad

As soon as the news came out, the market fluctuated. Bitcoin fell from a high of 91,000 USDT to 84,000 USDT at around 8 am this morning, with a 1-hour fluctuation of nearly 7.6%, and then rebounded to around 88,000 USDT. In addition, the market has also been caught in a battle between "good and bad". On the one hand, there is a view that the strategic reserve order is less than expected, causing traders to "sell the news"; on the other hand, there is also a view that in the long run, this is simply a huge positive.

Bitwise Chief Investment Officer Matt Hougan said that the US Bitcoin strategic reserve will greatly reduce the possibility of the US government "banning" Bitcoin in the future, and greatly increase the possibility of other countries following suit to establish Bitcoin reserves or accelerate their reserve process. In addition, it can make it more difficult for various institutions, including national wealth management platforms and quasi-governmental institutions such as the International Monetary Fund (IMF), to position Bitcoin as a dangerous or unsuitable asset to hold. David Bailey, CEO of Bitcoin Magazine, said that when the decision is recorded in history books, "it will prove to be the most important monetary policy decision since the Bretton Woods system." In addition, Solana co-founder Anatoly Yakovenko figuratively compared the executive order to a scalpel. He said, "The government did not bail out cryptocurrencies. It just further eliminated the regulatory uncertainty that has existed for the past four years. We need a stablecoin bill, guidelines for banks to deposit and withdraw cryptocurrencies, and clear rules on token issuance and DeFi from the U.S. SEC and CFTC."

In addition, some investors have analyzed the significance of the U.S. Bitcoin strategic reserve from other perspectives. From the perspective of the relationship between Bitcoin and the U.S. dollar, Blue Fox Notes believes that building a national reserve of cryptocurrency is "offensive and defensive" for the United States. Blue Fox Notes said, "Perhaps, building a strategic reserve of cryptocurrency is a way of defending the US dollar international monetary system. When Bitcoin grows large enough, the human monetary system is expected to be turned upside down. Therefore, for the United States, if it cannot be stopped, the sooner it acts, the easier it will be to gain the initiative. In addition, if the US dollar declines in the future and is replaced by other countries' legal tender systems, then once the US dollar loses its hegemonic position, cryptocurrency systems such as Bitcoin can be used as an alternative to other countries' legal tender systems." Primitive Ventures investment partner @YettaSing also retweeted and said, "If Bitcoin is included in the national reserve, it can only mean that there are cracks in the sovereign monetary system itself, and countries need to seek new credit anchors. This is a huge recognition of Bitcoin's monetary attributes."

Unlike the above optimism, many investors believe that this executive order does not meet expectations and is considered "bad news." @hexiecs said that this executive order is not breaking news. "The Bitcoin strategic reserve has been preheated for a very long time. Part of the expectation of the previous rise was that the United States would use the strategic reserve to buy more Bitcoin. Now that the expectation has been dashed, isn't it an obvious negative?" In addition, many investors have also expressed concerns that the US government may openly "confiscate" crypto assets in the future. @realwuzhe said, "The United States has now established a Bitcoin reserve, but it is not prepared to use taxpayers' money to buy coins. Where does the new currency come from? It must continue to be obtained through law enforcement. Next, the United States has a great motivation to take law enforcement actions against overseas exchanges and large holders of coins."

The debate between good and bad may be largely due to "position determines the mind." In addition to the debate, there are some details about the US Bitcoin strategic reserve that deserve attention. Alex Thorn, head of research at Galaxy Digital, pointed out that there is a difference between "seizure" and "confiscation". "The current balance of Bitcoin available for the US government to use as a strategic reserve is up to 88,000, which is only 43% of the current government holdings. This is because 112,000 will be returned to Bitfinex." Of course, whether the US government will eventually return the Bitcoin is still unknown. In addition, the Strategic Bitcoin Reserve signed by Trump is not the same as the Strategic Federal Reserve Act promoted by Cythia Lummis at the federal level. Alex Xu, research partner at Mint Ventures, pointed out that the former can be directly controlled by the government, while the latter needs to be legislated by Congress; the former itself does not have a separate budget for purchasing Bitcoin (if it is to be increased, it needs Congressional approval), while the latter will provide a separate budget for purchasing Bitcoin (the goal is to buy 1 million in 5 years). Therefore, "David Sacks's statement that 'the government will not acquire other assets for reserve assets' does not mean that the Bitcoin strategic reserve in the public's impression has suddenly become something that only relies on confiscations and does not spend money to buy Bitcoin separately."

Conclusion

In my opinion, the symbolic significance of the United States' establishment of a strategic Bitcoin reserve is far greater than the actual effect of the implementation of short-term policies. In the short term, it is normal for the market to react negatively to policy details that are not as expected. In the long run, this step is still an important signal of changes in the global financial landscape. Perhaps this is not a positive factor that can immediately reverse the current market, but there is no doubt that this will be a decision that will be written into history.

At the same time, the market's attention has been focused on the White House Crypto Summit to be held in the early morning of March 8. According to Fox reporter Eleanor Terrett, the attendees include Ripple CEO Brad Garlinghouse, Coinbase CEO Brian Armstrong, Gemini founders Winklevoss brothers, Chainlink co-founder Sergey Nazarov, Multicoin managing partner Kyle Samani, Paradigm co-founder Matt Huang, Bitcoin Magazine CEO David Bailey, etc., and Trump will also give a speech.

Between policy implementation, market reaction and the upcoming summit, the US cryptocurrency policy is at a new turning point. Whether this roundtable forum on Saturday can bring more signals to the market or provide more substantial progress in the implementation of the Bitcoin strategic reserve will undoubtedly become the focus of the future development of the market and the industry.