One day before holding the White House Crypto Summit, President Donald Trump made history in the cryptocurrency space by creating a Strategic Bitcoin Reserve. An executive order established the reserve with the goal of accumulating Bitcoin and other digital assets under the U.S. Treasury Department.
Bitcoin Reserve and Digital Asset Stockpile
The newly formed bitcoin reserve will be capitalized with BTC confiscated in criminal and civil forfeiture proceedings. Trump’s executive order also establishes a U.S. Digital Asset Stockpile, which will manage Ethereum, Solana, XRP, and Cardano, among other cryptocurrencies.
“Bitcoin is the original cryptocurrency,” the executive order states. “Because there is a fixed supply of BTC, there is a strategic advantage to being among the first nations to create a strategic bitcoin reserve.”
This move highlights the growing importance of crypto in the U.S. economy and signals a shift from the Biden administration’s previous regulatory crackdown on digital assets.
Effect on the Price of Bitcoin and Market Responses
As investors responded to Trump’s remarks, there were swings in the price of Bitcoin. White House AI and cryptocurrency czar David Sacks disclosed that the government owns almost 200,000 Bitcoin, which is worth about $17.5 billion at the current price of $87,000.
Despite market excitement, some critics remain skeptical. Hilary Allen, a law professor at American University, argued that the Bitcoin reserve could be unstable.
“The second you start to sell, the price is going to start tanking,” Allen told CNN. “It just shows how pointless the whole thing is unless it provides exit liquidity for existing holders.”
Trump’s Position in Favor of Crypto vs. Regulatory Obstacles
In sharp contrast to the Biden government’s more stringent approach, the Trump administration has positioned itself as crypto-friendly. Industry executives will talk about potential policy options that might influence future cryptocurrency legislation in the United States at the White House Crypto Summit.
Trump’s post on Truth Social also revealed that in addition to Bitcoin and Ethereum, the government would accumulate Solana, XRP, and Cardano—a move that sparked debate among industry experts.
David Sacks, who previously invested in crypto, assured that he had sold all holdings before Trump took office. He also promised full transparency following an ethics review.
What Will Happen to the Crypto Market Next?
Investors are expecting more significant developments at Friday’s White House Crypto Summit. According to market analysts, the main topics of discussion will include government policies on digital assets, institutional adoption, and crypto laws.
“There may still be several surprises coming out of the summit,” said Gerald Gallagher, General Counsel for Sei Labs. “The industry leaders attending should be able to continue advising on policy, and we need to keep winning with regulators and courts with this administration’s support.”
As the crypto industry watches closely, one thing is clear: Trump Bitcoin policies are shaking up the market in a way never seen before.
Source: CNN