Crypto takes a dip as Trump signs Bitcoin Reserve order
- Reference: 1741379772
- News link: https://www.theregister.co.uk/2025/03/07/trump_signs_bitcoin_reserve_eo/
- Source link:
Bitcoin, Ethereum, and other crypto tumbled, and recovered somewhat, as people processed the [1]announcement . It should be noted the markets in general in the United States [2]are down at the moment due in large part to the White House [3]flip-flopping on import tariffs against America's neighbors and allies. It's therefore not just unhappiness with the President's approach to Uncle Sam holding digital assets that's driving down the value of cryptocurrencies.
Trump's executive order boils down to this: The Treasury Department has been ordered to establish two funds, a Strategic Bitcoin Reserve and a Digital Asset Stockpile. Both are being populated with cryptocurrencies that the federal government already holds that were seized as part of criminal or civil asset forfeiture or as part of a monetary penalty, with the stockpile being filled with everything aside from Bitcoin.
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Federal agencies in possession of BTC and other coins have 30 days to hand it all over to the Treasury. The Treasury, in turn, has to put all of its crypto holdings into the reserve or stockpile, except where officials have a reason to hang onto it to repay crime victims, settle debts, or pay for services. Interestingly enough, it's [5]reported the US Marshals Service, for one, has lost track of exactly how much cryptocurrency it has – among other things, the service manages assets seized by the Feds – complicating this whole process, if true.
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The Bitcoin in the reserve "shall not be sold and shall be maintained as reserve assets of the United States," the President's order reads. While the same doesn't apply to the stockpile, that means all the Bitcoin headed for the reserve is officially out of the market, potentially helping nudge the price up of all Bitcoin as there's less of it in circulation. On the other hand, the coins aren't being used in transactions and commerce.
"From a general economic perspective, if the assets are locked up in a digital vault they just sit there, and it doesn't matter much if they appreciate in value," Martha Bennett, Forrester VP principal analyst covering blockchain, web3, and digital assets, told The Register in a phone conversation.
If the assets are locked up in a digital vault they just sit there, and it doesn't matter much if they appreciate in value
According to White House crypto and AI czar David Sacks, the US government [8]has around 200,000 BTC acquired through forfeitures, worth approximately $18 billion as of writing. Exactly which other cryptocurrencies are destined for the stockpile has not been disclosed, and Bennett pointed out most forfeitures have been in Bitcoin.
The President earlier indicated Ripple (XRP), Solana (SOL) and Cardano's ADA would be included, though when a White House official [9]clarified today Trump had only listed off possibilities rather than commitments, prices of all three tokens plummeted.
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When asked whether Trump's order leaves the United States as a Bitcoin bagholder with a pile of assets that could be turned into cash or exchanged for other tokens, but won't be, Bennett had to admit it was a distinct possibility.
"Looking at it in the cold light of day, that argument makes a lot of sense," Bennett opined.
Crypto critic [11]Molly White told us via email the executive order makes it pretty clear that practical arguments for the establishment of a Bitcoin reserve have been rendered moot by the order itself.
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"They've yet to establish any clear argument for why such a reserve is beneficial to the country," White said. "Attempts by some politicians (eg, [13]Lummis , saying it could be used to pay off the national debt if Bitcoin appreciates) have been explicitly contradicted by the point in the executive order that the US won't sell the tokens."
Strike one for a happy crypto industry.
No buying, no market boost
The other major sticking point in Trump's proclamation, and likely the one that made the crypto world unhappy with his announcement, is the fact that it only allows for the reserve and stockpile to grow in one of two cases: Either through additional forfeited assets, or in the case of the reserve, through purchases of Bitcoin that "are budget neutral and do not impose incremental cost on US taxpayers."
The order makes no carveout for buying non-Bitcoin crypto assets.
White thinks most of the dissatisfaction among the digital asset crowd this week over the order has come from the realization that Trump isn't going to be "pumping their bags by buying a bunch more crypto," a point on which Bennett agrees. Remember, this is the same President that [14]pumped meme coins about himself and his wife just as he was returning to power in January.
"A lot of people had gotten very excited about the prospect of the Trump administration creating something more akin to what RFK Jr described — a 'strategic reserve' established by going out and buying massive amounts of Bitcoin," White said, referring to newly installed Health Secretary Robert F. Kennedy Jr.
"There's still some room for new acquisitions, [but] it's still vague, and the 'budget neutrality' caveats certainly don't make purchases of that size look terribly likely."
Bennett, likewise, told us the crypto community was hoping that the stockpile would involve buying lots of cryptocurrencies and pushing up the price - something that wouldn't just please those who want to see the price rise, but fulfill the hopes of speculators, too.
"There is a whole speculative industry around cryptocurrency," Bennett said, referring to futures and other bets that people have made on Bitcoin and other coins. Those bets, Bennett pointed out, "are not going to happen since there's no buying."
[15]Cryptocurrency policy under Trump: Lots of promises, few concrete plans
[16]Trump's freshly minted meme coin passes $10B market cap
[17]Man who binned 7,500 Bitcoin drive now wants to buy entire landfill to dig it up
[18]FBI officially fingers North Korea for $1.5B Bybit crypto-burglary
As for how a "budget neutral" purchase of Bitcoin might work out, Bennett said the only thing she can think of, given it's the Treasury running the whole show, is if there's a budget surplus at the Federal Reserve, which is supposed to be handed back over to the Treasury every year.
"Currently the Fed doesn't return any money to the treasury, so [that avenue is] hypothetical," Bennett said.
Strike two for crypto hopefuls, then.
Additionally, said White, cryptocurrency holders and traders are worried the executive order will give the government further reason to crack down on them.
"Some are (reasonably) pointing out that this serves as a twisted incentive for the government to seize more Bitcoin and crypto assets to pocket it," White said.
"They've tried to stave off complaints from the non-crypto world that the administration is just taking citizens' money and funneling it into the pockets of crypto holders, but all of the vagueness about the specifics of the reserve until now have resulted in that perception regardless."
And there's your third strike.
As of writing, BTC has slipped nearly three percent in the past 24 hours, and is down more than seven percent over the past five days, and 10 percent for the month. On the other hand, it is up more than 60 percent over the past six months. and 30 percent for the year. ®
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[1] https://www.whitehouse.gov/presidential-actions/2025/03/establishment-of-the-strategic-bitcoin-reserveand-united-states-digital-asset-stockpile/
[2] https://finance.yahoo.com/news/live/stock-market-today-nasdaq-enters-correction-sp-500-sinks-to-lowest-since-november-as-stocks-get-clobbered-on-trump-tariff-whiplash-210544344.html
[3] https://www.cnn.com/2025/03/06/politics/trump-canada-mexico-tariffs-whiplash-analysis/index.html
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Z8t6i4V9VxBt4bCF0GrhlAAAAJc&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://www.coindesk.com/policy/2025/02/20/u-s-marshals-service-managing-seized-assets-can-t-say-how-much-crypto-it-holds
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z8t6i4V9VxBt4bCF0GrhlAAAAJc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z8t6i4V9VxBt4bCF0GrhlAAAAJc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[8] https://x.com/davidsacks47/status/1897802280738734236
[9] https://www.coindesk.com/markets/2025/03/07/ada-xrp-drop-as-crypto-czar-sacks-backpedals-trump-s-crypto-reserve-plan
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z8t6i4V9VxBt4bCF0GrhlAAAAJc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[11] https://www.web3isgoinggreat.com/
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z8t6i4V9VxBt4bCF0GrhlAAAAJc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[13] https://www.lummis.senate.gov/press-releases/lummis-introduces-strategic-bitcoin-reserve-legislation/
[14] https://www.axios.com/2025/02/27/trump-meme-coin-pump
[15] https://www.theregister.com/2024/11/30/cryptocurrency_policy_trump/
[16] https://www.theregister.com/2025/01/20/trump_meme_coin/
[17] https://www.theregister.com/2025/02/11/bitcoin_drive_landfill/
[18] https://www.theregister.com/2025/02/27/fbi_bybit_korea/
[19] https://whitepapers.theregister.com/
Let me get this straight:
the US government is transferring all their crypto to one wallet - to make it easier for hackers to take in one swoop...?
We'll have a good laugh at your 'joke alert' when your prediction comes true.
His password has been changed to [1]"MAGA2024!"
[1] https://www.bbc.com/news/technology-55337192
Letters AND numbers?!?
AND a full characters long??!??
Corrupt to the core
Not like anyone involved in that government have investments in crypto.
Oh...
To prevent people hoarding assets, imagine a crypto-currency that "times out" after a year. That way, you can earn some money by doing good work, spend it to live and enjoy life and not worry about criminals (hackers, governments, drug cartels) getting too involved because they can't seriously grow their empires with it.
OK, let me buy my groceries from you with this crypto-coin that's about to time out.
Sure, when the transfer occurs to my private key, the timer is reset anyway. Either way, I will use it to renew my stock that same week anyway.
Plus, I am sure you have paid for groceries with a pretty war torn paper note before. I doubt that would last longer than a year.
"the transfer occurs to my private key, the timer is reset anyway"
In that case it's still a target for criminal users. It gets reset when it's stolen and it doesn't matter if it times out or not, it can be kept going indefinitely by transferring back & forth between two accounts.
Didn't some famous economist, rather tongue in cheekly, suggest making money out of a radioactive element so people wouldn't hoard it and would be keen to pass it along as quickly as possible
"making money out of a radioactive element "
Not exactly.
I think you'll find Jerry Pournelle's "Yet another modest proposal" and the "Roentgen Standard" might get you something relevant.
This being the FOCF you know someone's going to benefit out of it.
Just probably not the people who backed it thinking it was going to be them.
It's been proposed. It's a stupid idea for many obvious reasons, but it's also easily defeated by exchanging all my money before it's going to expire with others whose money is also going to expire. It just happens that we did similar amounts of work for one another around that time which we feel deserve similar amounts of repayment. Clock reset. It also doesn't do a thing to prevent criminals from using it; criminals want to spend their gains too, so how does preventing saving do anything against them? Of course, you could build in lots of extra features to make it harder for criminals to use it, most of which would be detrimental to and detested by law-abiding users.
A lot of effort has gone into encouraging people to save money because people who have money available when they need it tend to do better than people who spent all of it. Forcing people who want to save to spend it anyway kind of breaks all of that, generating exactly the opposite of the benefits from it. You'd also get some fun bonus problems from people who didn't need to be convinced to save and now face a use or lose situation. You also get two groups of angry people who might want to attack you because either you took away their money, or to avoid you taking away their money, they invested it in something that doesn't expire but wasn't a good choice. True, that second one normally isn't your fault, but since they had to invest or you would have confiscated it through automatic expiration, they'll ascribe any downstream negative consequences to you. Meanwhile, I see no positives whatsoever.
Being endorsed by this president in this form ...
... must feel insulting, as he proves every single day in office that he does not understand at all how an economy works.
Even for Coin Bros.