The announcement by the US government of a Strategic Bitcoin Reserve (SBR) may have come as a surprise, but if you follow politics it is actually part of a plan the new administration considers. This is to bring cryptocurrency to the forefront of technological priorities to bring more competence to industries developing in the space.
This is an executive order as stated by the President:
“By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered …
Creation and Administration of the Strategic Bitcoin Reserve and United States Digital Asset Stockpile” — (Sec. 3)
To summarize, the executive order directs the Secretary of the Treasury to do the following:
- Establish a “Strategic Bitcoin Reserve”: This reserve will be capitalized with Bitcoin (BTC) forfeited to the US government that isn’t needed for victim restitution or legal requirements. This Bitcoin cannot be sold and will be maintained as a US reserve asset for governmental objectives. Agencies must report their forfeited BTC holdings to the Treasury within 30 days.
- Establish a “United States Digital Asset Stockpile”: This stockpile will hold all other forfeited digital assets (excluding BTC) owned by the Treasury, again excluding assets needed for restitution or legal requirements. Agencies must also report these holdings within 30 days. The Treasury will determine responsible management strategies for these assets.
- Develop Budget-Neutral Bitcoin Acquisition Strategies: The Treasury and Commerce Secretaries must create plans to acquire more Bitcoin without costing taxpayers. However, acquiring other digital assets beyond forfeiture requires further executive or legislative action.
- Restrict Disposal of Government Digital Assets: Agencies cannot sell or dispose of any government-held digital assets (BTC or other) except under specific conditions: Treasury’s management of the Stockpile, court order, legal requirements, return to victims, use in law enforcement operations, equitable sharing with state/local law enforcement, or to satisfy specific legal statutes related to forfeited assets.
- Evaluate Legal and Investment Considerations: Within 60 days, the Treasury Secretary must provide an evaluation of the legal and investment aspects of managing both the Bitcoin Reserve and the Digital Asset Stockpile, including account locations and any necessary legislation.
The plan is for the US Department of the Treasury to allocate $76 Billion for purchasing Bitcoin over a period of 5 years. The Treasury will buy 200,000 BTC every year over that 5 year period until the US SBR has 1 Million BTC. The source of funds is budget-neutral so taxpayer money will not be used for purchasing the Bitcoin. Instead, funds can come from other sources that the Treasury can find.
The reserves can be used to help the US government in paying the national debt, which is now well over $36 Trillion (as of April 29, 2025). A report from investment firm VanEck suggested that the Bitcoin reserve could offset national debt by the year 2049. This is based on the assumption that the price of Bitcoin will continue to appreciate in the future.
While Bitcoin has potential as a strategic reserve asset, its extreme price volatility and limited scalability are major obstacles. However, the new US administration in 2025 is pro-crypto and they can help guide Bitcoin's role in the global financial system with this move.The success of this strategy will depend on what exactly the plan is for Bitcoin reserves and how the administration will manage it.
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Disclaimer: This is not financial advice. The information provided is for reference and educational purposes only. Investing in cryptocurrency like Bitcoin involves risk. Please DYOR to learn and understand more about cryptocurrency.
