Trump Establishes U.S. Bitcoin Reserve, Market Reacts
U.S. President Donald Trump signed an executive order on Thursday to create a government-held Bitcoin reserve. This initiative aims to capitalize on Bitcoin seized through criminal and civil asset forfeiture, but it triggered a significant market reaction, with Bitcoin’s price dropping by as much as 5.7%. As of 0100 GMT, Bitcoin was valued at $84,707.
Details of the Executive Order
The executive order, announced by White House cryptocurrency advisor David Sacks, outlines that the reserve will be funded by nearly 200,000 Bitcoins that the federal government has acquired through forfeiture proceedings. Sacks emphasized that this initiative will not impose any costs on taxpayers, stating, “The Reserve will be capitalized with Bitcoin owned by the federal government.” He described the reserve as a “digital Fort Knox,” intended to serve as a store of value rather than a trading asset. The order also mandates a comprehensive accounting of the government’s Bitcoin holdings, which Sacks claims have never been properly audited. He revealed that over the past decade, the U.S. government sold approximately 195,000 Bitcoins for a mere $366 million. Had these Bitcoins been retained, they would now be valued at around $17 billion.
Future Plans for Bitcoin Acquisition
In addition to establishing the Bitcoin reserve, the executive order empowers the Treasury and Commerce Departments to explore budget-neutral strategies for acquiring more Bitcoin. This move reflects a significant shift in Trump’s approach to cryptocurrency. Once dismissive of Bitcoin, calling it a “scam,” Trump has now embraced it as a vital component of the U.S. financial landscape. The order also introduces a separate “U.S. Digital Asset Stockpile” for holding other cryptocurrencies seized by the government. Trump’s recent comments about potentially holding lesser-known cryptocurrencies like XRP, Solana, and Cardano have further fueled interest in this initiative.
Upcoming Crypto Summit
As part of his commitment to the cryptocurrency sector, Trump is set to host a “Crypto Summit” at the White House on Friday, where he will meet with industry leaders. This summit aims to foster dialogue on the future of digital assets and explore regulatory frameworks that could support the growth of the cryptocurrency market. Bitcoin, created in response to the 2008 financial crisis, has yet to achieve widespread acceptance as a payment method. However, its limited supply of 21 million coins has led many to view it as a hedge against inflation. Some experts believe that a strategic Bitcoin reserve could even play a role in addressing the U.S. national debt in the future.
The cryptocurrency market has experienced significant fluctuations since Trump’s election, with Bitcoin’s price peaking above $100,000 before cooling off. As the U.S. government takes a more active role in the cryptocurrency space, the implications for both the market and regulatory landscape remain to be seen.
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