The U.S. Strategic Bitcoin Reserve Is Here!

On March 6, President Donald Trump signed a historic Executive Order to establish a strategic Bitcoin reserve and a digital asset stockpile. 

Bitcoiners have been speculating for months now about when (or if) it would happen, and now it finally has. 💪

In today's newsletter, I’ll explain why I believe this is a super bullish development that could kickstart the arms race for nation-state Bitcoin adoption. 

The Details of the Executive Order 📝

In the weeks before March 6, most people in the crypto community expected a strategic crypto reserve rather than a dedicated Bitcoin reserve, especially after Trump tweeted that the likes of SOL, ETH, and others would likely also become treasury holdings. 

However, just like he did in the past, President Trump surprised everyone by signing an Executive Order to establish a strategic Bitcoin reserve AND a digital asset stockpile. 

Now, taking a closer look at the Executive Order reveals an exciting time ahead! 

The reserve will be made up of coins that have been confiscated by the U.S. government. It will follow Trump’s new policy of “never sell your bitcoin.”  

The EO states: “Government BTC deposited into the Strategic Bitcoin Reserve shall not be sold and shall be maintained as reserve assets of the United States utilized to meet governmental objectives in accordance with applicable law.” 

This is a huge deal, as it amplifies BTC as a store of value for the U.S. government.

The Executive Order also includes a digital asset stockpile, which will include other assets, mainly ETH, SOL, ADA, and XRP. 

But there is a catch. 

The EO stipulates: “However, the United States Government shall not acquire additional Stockpile Assets other than in connection with criminal or civil asset forfeiture proceedings or in satisfaction of any civil money penalty imposed by any agency without further executive or legislative action.”

The digital asset stockpile will likely be managed like a fund. 

Newly appointed Commerce Secretary Howard Lutnick was eager to push for a sovereign wealth fund in the weeks leading up to it, and the digital asset stockpile could be its version of this strategy. 

We’ll wait to see if that will become a reality. 

While the EO clearly stated that no BTC shall be sold, the administration is more free-flowing in the digital asset stockpile.

I don’t expect them to sell any of these assets right away, but as there is no selling requirement, we could see a future where assets out of the stockpile are sold and potentially turned into BTC or used to pay off the debt.  

Lastly, it also states that in the next 30 days, the Secretary of the Treasury, the Secretary of Commerce, and the President’s Working Group on Digital Asset Markets shall establish an office to determine budget-neutral strategies to acquire Bitcoin and to solve all remaining administrative issues. These include accounting, oversight of the transfer of the confiscated assets, and the custody of all government assets going forward.

The White House Acknowledges Bitcoin as Digital Gold 🏅

Interestingly, there was more in the EO that’s bullish for Bitcoin (at least in my view). 

The biggest statement, in my opinion, is the following sentence in the EO: “As a result of its scarcity and security, Bitcoin is often referred to as ‘digital gold’. 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.”

Yep, you read that right! 

The U.S. government acknowledges that Bitcoin is digital gold and has all the characteristics of being a great store of value for the U.S. 

The fact that I would read this statement in an official document signed by the President was unimaginable just a year ago. 

Just as we’ve seen with the spot Bitcoin ETFs, a change of public perception by big players is a major milestone for Bitcoin. 

We managed to get over the hump with institutional investors and Wall Street. 

Now, we have approval for “digital gold” from one of the biggest governments in the world. It will be interesting to see how this will impact the public perception of others going forward. 

The Next Steps and How Long It Will Take Until the U.S. Can Buy Bitcoin 🚀 

OK, so far, we know the President has announced the strategic crypto reserve, and there is a 30-day window in which everyone involved must come up with a strategy. 

But what could that strategy look like, and what are the options? 

Because the President mandated that various secretaries devise a plan, the ball is now in their court, and they must present a plan of action. Once that is established, Congress would need to approve it depending on how the assets will be acquired. There might also be some legal challenges to such a path. 

So far, it’s not clear if this will be the path but if it were to happen, this could slow things down and we would need to be a bit more patient. Also, it would be the more cumbersome path forward as it would require various rounds of oversight, and you could potentially miss out on a great buying opportunity. 

I imagine the administration wants to avoid this, as they are on their way to becoming the crypto hub of the world and using this great opportunity to their advantage. 

This is where Senator Cynthia Lummis comes in. 

She was already a big proponent of the strategic Bitcoin reserve and has proposed a bill in the past in which she stated that the government should buy up to 1 million BTC and hold onto it for the next 20 years. 

With her more prominent role on the banking committee, she’s now in the prime position to work on favorable legislation for Bitcoin and digital assets to turn this proposal into reality. The bill is called the BITCOIN ACT, and she has already found five co-sponsors in the Senate. 

I’ll be interested to see how this proposal impacts the 30-day window and whether parts of it could be used to develop a buying plan for the Bitcoin reserve or even as a framework for the next steps. 

The Arms Race for Nation State Bitcoin Adoption Is in Full Swing! 💪

With the announcement of the strategic Bitcoin reserve out now, I want to make one more interesting point: the domino effect this could have on other nations. 

After all, when the U.S. does something, other countries usually follow suit. 

The U.S. isn’t the only nation holding Bitcoin or other digital assets. 

China and the UK also hold bigger amounts, closely followed by Ukraine and Bhutan.

While I don’t expect all of these nations to immediately make a similar announcement, the potential is there. 

Bitcoin has become a household name in politics, and it’s a power play if you can hold onto it or even increase your position. 

And the ball has already started rolling…

A few weeks ago, I wrote about the proposal by the Czech National Bank’s chief, who’s also looking to set up a Bitcoin reserve. He sees great potential in Bitcoin as a store of value, and considering how many Bitcoin companies reside in the Czech Republic, it makes sense to invest in this ecosystem. 

We’re just beginning a new era in Bitcoin, in which we no longer debate whether companies or individuals hold BTC but nation-states. This is the most interesting era, as we’ll see big movements and major announcements by whoever decides to follow the U.S. and establish a strategic Bitcoin reserve. 

Your fellow stacker in sats, 

Patrick Lowry