Trump signs executive order on strategic Bitcoin reserves: What impact will it have on the crypto market?

Compiled by: Deng Tong, Golden Finance

David Sacks, a White House artificial intelligence and cryptocurrency expert, said that US President Donald Trump signed an executive order to establish a strategic Bitcoin reserve, which will initially be funded by assets seized by the government.

Sacks noted:

“Just minutes ago, President Trump signed an executive order establishing a strategic bitcoin reserve.

The reserve will be capitalized with bitcoins owned by the federal government that have been seized as part of criminal or civil asset forfeiture proceedings. This means it will not cost taxpayers a penny.

It is estimated that the U.S. government owns approximately 200,000 bitcoins; however, a complete audit has never been conducted. The executive order directs a full accounting of the federal government's digital asset holdings.

The United States will not sell any of the bitcoin deposited into the reserve.It will be held as a store of value. For the cryptocurrency often referred to as "digital gold," the reserve is like a digital Fort Knox.

Premature sales of Bitcoin have cost American taxpayers more than $17 billion in value. Now the federal government will develop a strategy to maximize the value of its holdings.

The Secretaries of the Treasury and Commerce are authorized to develop budget-neutral strategies to acquire additional Bitcoin, provided that those strategies do not increase costs to American taxpayers.

Additionally, the executive order establishes the United States Digital Asset Reserve, which includes digital assets other than Bitcoin that have been seized in criminal or civil proceedings. The Government will not acquire assets for the reserve other than those acquired through forfeiture proceedings. The purpose of the Reserve is to be responsible for the management of government digital assets under the leadership of the Treasury Department.

Promises Fulfilled

President Trump promised to establish a strategic bitcoin reserve and a digital asset reserve. Those promises have been fulfilled.

This Executive Order underscores President Trump’s commitment to making the United States the “Crypto Capital of the World.”

I want to thank the President for his leadership and vision in supporting this cutting-edge technology, and for his fast execution in supporting the digital asset industry. His Administration is truly moving at “tech speed.”

I also want to thank the President’s Digital Asset Markets Task Force—particularly Secretary of the Treasury Scott Bessant and Secretary of Commerce Howard Lutnick—for their help and support in completing this work. Finally, Beau Hines played a key role as the executive director of our task force. ”

Forbes reporter Eleanor Terrett wrote on the X platform,

Therefore, @realDonaldTrump’s executive order requires two things - strategic reserves and inventory.

The strategic reserve will contain only $BTC, the digital asset with the greatest store of value, using about 200,000 tokens the government has held over the years through criminal and civil forfeiture. Sacks said Bessent and Lutnick were also authorized to explore ways to acquire more Bitcoin at no cost to taxpayers.

The executive order also requires a full audit of all digital assets currently held by the government.

The other is a digital asset inventory that contains assets other than Bitcoin — presumably $XRP, $ADA, $ETH and $SOL (as the President announced last weekend), and possibly other assets.

The key difference between a reserve and a stockpile is that the government will not actively look for ways to buy more of the assets in the stockpile. It will only explore using government funds (if they can find a budget-neutral way to do it) to buy $BTC.

The purpose of the reserve is to “responsibly manage the government’s digital assets under the leadership of @USTreasury,” Sachs said.

The impact of the strategic bitcoin reserve executive order on the encryption market

Coinbase director Conor Grogan posted on social media, "According to my estimate, the US government holds 198,109 bitcoins. This executive order will reduce the selling pressure by about $18 billion." 

Bitwise Chief Investment Officer Matt Hougan commented: "I'm not sure how the market will view this in the short term. But I'm sure that in the long run, this is extremely beneficial to Bitcoin. ”

Previously, according to JPMorgan Chase, the probability of the US strategic cryptocurrency reserve being approved is less than 50%, and tokens like XRP, Solana (SOL) and Cardano (ADA) are likely not to be included. Nikolaos Panigirtzoglou, managing director of global market strategy at JPMorgan Chase, said in an interview: "We believe that the approval of the US strategic cryptocurrency reserve is not the most likely scenario (assuming that congressional approval is required). Therefore, we believe that its probability is less than 50%."

The crypto market did not rebound significantly

After the news that Trump signed the executive order on strategic Bitcoin reserves was released, the crypto market did not rebound significantly. As of press time, BTC has only risen by 2.5%.

1. The risk of a U.S. recession puts pressure on crypto assets

Noelle Acheson, a crypto macro analyst, said, "The spread between the U.S. 10-year Treasury yield and the 3-month Treasury yield turned negative again, causing the yield curve to invert, suggesting that the U.S. economy may be in recession, that is, the U.S. gross domestic product (GDP) has shrunk for two consecutive quarters. This is usually not a good signal. We are still dealing with a battle between different narratives - on one hand, risk aversion may keep Bitcoin (BTC) and other crypto assets under pressure for some time due to macroeconomic uncertainty. But on the other hand, the 'safe haven' narrative is strengthening, and the positive news from the White House further highlights the surprising change in official attitude.

The Bloomberg Dollar Index fell for a fourth consecutive day, the longest losing streak since September 2024, after the Trump administration said tariffs on goods and services covered by the US-Mexico-Canada Agreement between Canada and Mexico would be suspended until April 2. The euro narrowed its gains after the European Central Bank cut interest rates as expected, but suggested that the rate cuts may be nearing the end. The Bloomberg Dollar Index fell 0.2%, falling as much as 0.4% during the session; the index fell 2.2% in four days and headed for its worst single-week performance since November 2022, with the non-farm payrolls report due on Friday.

JPMorgan Chase & Co. strategists warned that their forecasts for U.S. stock gains at the beginning of the year were at risk of failing. JPMorgan Chase & Co. maintained its year-end target of 6,500 for the S&P 500, but warned that the forecast had a "large standard error." The target means that the S&P 500 index has about 13% room to rise by the end of the year from Thursday's closing level of 5,738.52. "It is possible that the S&P 500 will not reach this level until 2026," the team led by Dubravko Lakos-Bujas said in a report to clients on Thursday. The team pointed out that economic data is volatile, which to some extent indicates that economic growth is slowing while inflation remains stubborn. It is expected that the S&P 500 index will fluctuate between 5,200 and 6,000 points in the short term, and the performance of individual stocks may be highly differentiated.

2. The international situation is not very clear

US President Trump expressed dissatisfaction with the Japan-US Security Treaty on the 6th, calling it one-sided, and believed that the treaty reflected that the United States must protect Japan, while Japan has no obligation to protect the United States. According to reports, Trump may use this to ask Japan to increase its defense spending in the future.

US Special Envoy for the Middle East Witkov said on the 6th that US and Ukrainian officials are discussing arrangements for talks in Saudi Arabia next week. The talks will discuss the framework of the Russian-Ukrainian peace agreement and achieve a preliminary ceasefire between Russia and Ukraine.Witkov said that he had a hunch that the US-Ukraine talks would achieve good results and would send a "positive signal" to the Russian side, because the Russian side also showed a "proactive" attitude in promoting negotiations aimed at ending the conflict and achieving peace.

U.S. President Trump signed an amendment to tariffs on Mexico and Canada on the 6th, exempting products that meet the "United States-Mexico-Canada Agreement" (USMCA) from tariffs until April 2. Trump posted on social media earlier that day that the 25% tariff on Mexico will be suspended until April 2. This decision applies to all goods and services covered by the "United States-Mexico-Canada Agreement" (USMCA).

3. The market may be waiting for more encryption policies to be implemented at the White House summit tomorrow

Tomorrow, more than 20 executives, investors and celebrities in the cryptocurrency field will gather at the White House Cryptocurrency Summit to plan the future development direction of the encryption field under Trump's leadership. People familiar with the matter revealed that the event is likely to become a platform for promoting multiple administrative measures related to cryptocurrencies, and multiple options are currently under consideration. One of the people familiar with the matter said that potential proposals would involve the tax treatment of cryptocurrencies and would likely require review and approval by Congress. These people familiar with the matter said that these actions are still under discussion and may not be implemented or may change in the end.

Reference source: Golden Finance, Twitter, CoinTelegraph