Trump’s Strategic Bitcoin Reserve Faces Criticism
President Donald Trump’s executive order to create a Strategic Bitcoin Reserve and Digital Asset Stockpile has sparked debate among industry watchers. The reserve will be funded by cryptocurrencies forfeited during criminal and civil proceedings.
White House AI and crypto tsar David Sacks described the initiative as a “digital Fort Knox for cryptocurrency,” drawing parallels to the Kentucky military base that stores a significant portion of US gold reserves. However, crypto enthusiasts have criticized the government’s approach, with some arguing it lacks transparency and boldness.
Charles Edwards of Capriole Fund called the announcement “a pig in lipstick,” suggesting it’s merely a rebranding of existing government Bitcoin holdings without any new acquisitions. Sacks ordered a comprehensive accounting of the federal government’s existing crypto reserves, estimated at 200,000 Bitcoin, valued at $17.5 billion.
The Treasury and Commerce secretaries will develop strategies to acquire more government Bitcoin, but only if they are “budget neutral” and don’t add to the US deficit or debt. Jason Yanowitz of Blockworks supports the Bitcoin reserve concept but criticizes the inclusion of other cryptocurrencies, calling it a “horrible precedent.”
Other analysts, like Russ Mould of AJ Bell, view the approach positively, stating it makes more sense than actively buying assets. The US maintains strategic reserves of national assets to diversify holdings and mitigate financial risk, similar to its petroleum reserve.
Sacks assured that the crypto reserve “will not cost taxpayers a dime” and that the US won’t sell any Bitcoin deposited in the reserve. The market reacted negatively to the implication that the US wouldn’t be buying Bitcoin, causing prices to drop over 5%.
Trump’s engagement with the crypto community during his presidential campaign contrasts with former President Joe Biden’s crackdown on crypto, citing fraud concerns. The crypto community remains divided on the initiative’s potential impact and transparency.
