Golden Encyclopedia | What role do gold, oil, and BTC play in US reserves?

Author: Arunkumar Krishnakumar, CoinTelegraph; Compiled by Wuzhu, Golden Finance

1. Current State of U.S. Reserves: The Role of Gold, Oil, and Bitcoin

The U.S. government has long relied on gold and oil as reserve assets, but with the growing popularity of Bitcoin among institutions, its potential role as a strategic reserve has greatly increased. With the new U.S. government taking office in January 2025, the possibility and potential of Bitcoin as a strategic reserve have ushered in a major positive.

While gold has historically been the backstop of the monetary system and oil remains an important economic and security asset, Bitcoin represents a new type of digital reserve that challenges the traditional financial paradigm.

The United States has large gold and oil reserves, but its Bitcoin holdings are relatively small, mainly obtained through asset seizures. As of the third quarter of 2024, the United States held approximately 8,133.46 metric tons of gold, worth approximately US$789.87 billion (March 8, 2025), making it the largest sovereign holder of gold reserves.

These reserves were historically used to hedge against economic uncertainty and support the dollar before the gold standard was abandoned in 1971.

In the case of oil, the United States maintains a Strategic Petroleum Reserve (SPR), which holds approximately 372 million barrels as of August 2024. The SPR was established in the 1970s in response to the oil crisis and is valued at approximately $28 billion at current market prices. These reserves manage supply disruptions, control inflationary pressures, and stabilize energy markets during geopolitical crises.

Unlike gold and oil, Bitcoin is not an official reserve asset, but the U.S. government holds a large amount of Bitcoin through confiscation. It is estimated that the government controls about 200,000 Bitcoins, which is worth about $15.9 billion at a Bitcoin price of $79,515 (as of March 10).

However, unlike gold and oil, these assets are not stored as strategic reserves, but as assets awaiting auction or liquidation by the Department of Justice and the U.S. Marshals Service.

Second, Liquidity and Market Dynamics of Gold, Oil and Bitcoin

Gold, oil and Bitcoin each exhibit unique liquidity and market dynamics, with gold being the most stable, oil driven by geopolitical factors, and Bitcoin characterized by high volatility and 24/7 accessibility.

The depth of liquidity of an asset in the market is an extremely important indicator of the health of the asset. Generally, the higher the liquidity, the more options investors have in pricing and risk management.

Let's understand how gold, oil and Bitcoin differ in terms of liquidity and market dynamics:

• Gold: Gold remains one of the most liquid financial assets, with daily trading volumes exceeding $200 billion in futures markets, exchange-traded funds (ETFs) and over-the-counter (OTC). Gold's deep liquidity and universal recognition make it the asset of choice for central banks, institutional investors and governments seeking to hedge against inflation and currency fluctuations. While the price of gold fluctuates, historically, its volatility has been lower than that of most other assets.

• Oil: Oil is traded in huge volumes in both the spot and futures markets, with global futures trading reaching approximately 1 million barrels per day. Unlike gold, oil's liquidity is largely dependent on its industrial demand and geopolitical developments. Oil prices are highly sensitive to supply chain disruptions, decisions by the Organization of the Petroleum Exporting Countries (OPEC), and macroeconomic policies. Given its role in the energy market, oil is far more volatile than gold, and price swings can be caused by political instability, production cuts, or major conflicts.
  

• Bitcoin: Although Bitcoin is a relatively new asset, it is extremely liquid, with daily trading volumes on global exchanges often exceeding $30 billion to $50 billion. Although BTC has gained recognition from institutional investors, its volatility remains much higher than gold and oil due to speculative demand, regulatory uncertainty, and market structure. Unlike gold and oil, Bitcoin trades 24/7, which makes it unique in terms of accessibility and global liquidity.
  

3. Storage and security issues of reserve assets

Storage and security issues are critical for any reserve asset, and each asset has unique challenges and costs.

• Gold: Gold is typically stored in highly secure facilities such as Fort Knox, the Federal Reserve Bank of New York, and other vaults around the world. The cost of storing gold varies, but large-scale sovereign reserves require a lot of security infrastructure, transportation costs, and insurance. In addition, physical gold is susceptible to theft and requires constant audits to ensure authenticity and weight accuracy. In addition, the custody fees for institutions that store gold in vaults range from 0.10% to 0.50% per year, depending on the storage provider.

• Bitcoin: Bitcoin storage is fundamentally different because it is a digital asset. Governments and institutions typically use cold storage wallets and multi-signature security to protect their assets. While Bitcoin custody does not require physical storage facilities, cybersecurity risks such as hacker attacks, mismanagement of private keys, and regulatory oversight present significant challenges. Institutional-grade custody solutions such as BitGo, Fireblocks, and Coinbase Custody charge annual fees of 0.05% to 0.25%, which is much lower than the cost of gold storage. However, the irreversibility of Bitcoin transactions increases the risks associated with mismanagement or unauthorized access.
  

Fourth, the strategic and economic role of reserve assets

Gold, oil, and Bitcoin all play a strategic role in the global economy. Gold is a hedging tool, and oil affects geopolitical stability.

All of these assets have strategic and macroeconomic significance over time. Their narratives related to the broader capital markets may be just what is needed to attract investor interest.

• Bitcoin: BTC’s potential as a reserve asset lies in its decentralized nature, fixed supply (21 million BTC), and resistance to currency devaluation. Unlike gold and oil, which require extensive infrastructure, Bitcoin can be transferred globally in minutes and stored at almost zero cost.
  

As institutional adoption grows, Bitcoin’s strategic value as a hedge against inflation and government debt is increasingly recognized.

V. The Future of the U.S. Government’s Bitcoin Policy

Policy initiatives suggest that establishing a strategic Bitcoin reserve could allow it to stand alongside traditional assets such as gold and oil in the future.

In January 2025, President Donald Trump signed an executive order titled “Strengthening American Leadership in Digital Financial Technologies,” establishing the Presidential Working Group on Digital Asset Markets to explore the creation of a national digital asset reserve.

Building on this initiative, on March 7, President Trump signed another executive order establishing a “Strategic Bitcoin Reserve” and a “United States Digital Asset Reserve,” designed to position the United States as a leader in the cryptocurrency space. These reserves will be funded entirely with cryptocurrency seized in law enforcement actions, ensuring that no taxpayer funds are used.

However, the reserves will be funded using cryptocurrency already held by the government, primarily acquired through asset forfeiture rather than through new government purchases.

This strategy has drawn mixed reactions. While some see it as a positive step toward embracing digital assets, others have expressed concerns about the lack of new investment and the potential impact of using forfeited assets. As of March 10, 2025, the value of Bitcoin has fallen by more than 5% to approximately $79,515, reflecting market frustration with the way the reserve is funded.

Looking ahead, the U.S. government’s Bitcoin policy is likely to continue to evolve. The Presidential Task Force is expected to make recommendations by July 2025, which could impact future regulatory frameworks, investment strategies, and the integration of digital assets into the broader financial system.

As global interest in cryptocurrencies grows, the U.S. is likely to further refine its policies to balance innovation with security and economic stability, as well as traditional assets such as gold and oil, which remain integral to the nation’s financial strategy.