Bitcoin Dips After Trump’s Strategic Reserve Order: Why?
US President Donald Trump signed an executive order on March 7 establishing a Strategic Bitcoin Reserve (SBR) and a “Digital Asset Stockpile.” Both will initially be capitalized with cryptocurrency seized via government criminal and civil forfeiture proceedings, with future acquisitions possible under budget-neutral conditions.
Moments after the news went public, BTC’s price slipped from roughly $91,200 to about $84,667—a drop of more than 7%—in what many observers are calling a classic “sell the news” moment. Some market participants appear dissatisfied that the executive order is not immediately more aggressive in buying Bitcoin. Yet key industry voices maintain that the market may have misread the long-term implications.
Is The Strategic Bitcoin Reserve A Disappointment?
According to David Sacks, White House AI and crypto czar, who announced the development via X: “Just a few minutes ago, President Trump signed an Executive Order to establish a SBR. The Reserve will be capitalized with Bitcoin owned by the federal government that was forfeited as part of criminal or civil asset forfeiture proceedings. This means it will not cost taxpayers a dime.”
Sacks added that the US owns about 200,000 Bitcoin. However, he also clarified that “there has never been a complete audit” and that “the E.O. directs a full accounting of the federal government’s digital asset holdings.” Notably, the US President Trump commits to not selling “any Bitcoin deposited into the Reserve. It will be kept as a store of value. The Reserve is like a digital Fort Knox for the cryptocurrency often called ‘digital gold.’”
Additionally, the Secretary of Treasury and Commerce—led by well-known Bitcoin bull Howard Lutnick—is authorized to develop budget-neutral strategies for acquiring more Bitcoin. Although specific methods remain unclear, the move could lead to further US government BTC accumulation. “The Secretaries of Treasury and Commerce are authorized to develop budget-neutral strategies for acquiring additional Bitcoin, provided that those strategies have no incremental costs on American taxpayers,” Sacks writes via X.
Separate from the SBR, the executive order establishes a US Digital Asset Stockpile, which will include seized digital assets other than BTC. According to Sacks, this stockpile will not be actively expanded beyond whatever coins the government gains via forfeiture. Its purpose, he explained, is to exercise “responsible stewardship of the government’s digital assets under the Treasury Department.”
In the midst of the price volatility, industry leaders struck an optimistic tone. David Bailey, CEO of BTC Inc, wrote on X: “The global response to tonight’s news will be immediate. This is the shot heard around the world. Could not be more proud of this moment or more excited for what comes next. See you on the moon.”
Nic Carter, general partner at Castle Island Ventures stated via X: “Announcement couldn’t have gone better: Campaign promise kept. Bitcoin Reserve clearly distinguished from altcoin Stockpile. Bitcoin gets official USG seal of approval, no other coin does. No taxpayer $ spent to acquire coins (so no backlash). Future acquisition of coins likely left to Congress, as it should be.”
Bitwise Chief Investment Officer (CIO) Matt Hougan listed four reasons why the executive order has major bullish impacts on Bitcoin:
1) Dramatically reduces the likelihood the US government will some day “ban” Bitcoin;
2) Dramatically increases the likelihood that other nations will establish strategic Bitcoin reserves;
3) Accelerates the speed at which other nations will consider establishing strategic Bitcoin reserves, because it creates a short-term window for nations to front-run potential additional buying by the US;
4) Makes it much harder for institutions — from national account advisor platforms to quasi-governmental agencies like the IMF — to position Bitcoin as somehow dangerous or inappropriate to hold.
Renowned crypto analyst MacroScope (@MacroScope17), commented: “The market has been unsure there would even be a strategic reserve. Now, not only will there be one, actually acquiring more BTC looks likely. The immediate sell-the-news reaction aside, over the longer term, this is hugely bullish compared to the market’s expectations up to this point.”
The analyst expects that this news will ignite a “nation-state arms race psychology”. Also, he expects to see more 13F filings by sovereign wealth funds who waited for this announcement. “Critical to watch this in coming weeks and months,” he concluded.
At press time, BTC traded at $88,104.
Featured image created with DALL.E, chart from TradingView.com
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