What is the strategic Bitcoin reserve?

The Strategic Bitcoin Reserve (SBR) is a national reserve asset mechanism established by US President Donald Trump through an executive order on March 6, 2025, local time. It aims to incorporate Bitcoin (BTC) into the US strategic reserve system to address global economic uncertainty and strengthen the US’s leading position in the digital asset field. This plan marks a policy shift by the US government towards Bitcoin, formally recognizing it as a national reserve asset, similar to the Strategic Petroleum Reserve (SPR) or gold reserves.

On 2025/03/06, Trump ordered the establishment of a strategic Bitcoin reserve (Image source:https://www.youtube.com/watch?v=1o9w3YyeW10）

According to the executive order, the strategic Bitcoin reserves are managed by the U.S. Treasury Department, funded mainly from confiscated Bitcoins by the government, and pledged not to sell these Bitcoins, but to formulate tax-neutral policies to further expand the Bitcoin reserves. In addition, the executive order also establishes the U.S. Digital Asset Reserve, specifically for managing non-Bitcoin digital assets confiscated by the Treasury Department. Trump also further stated on his social platform Truth Social that the United States should become the ‘global capital of encryption,’ planning to include five digital assets such as Bitcoin, Ethereum (ETH), Ripple (XRP), Solana (SOL), and Cardano (ADA) in the new strategic reserve system.

US President Trump mentioned crypto strategic reserves in a tweet (Image source: Truth Details | Truth Social）

On the day after signing the second executive order, Trump hosted a ‘Digital Asset Summit’ at the White House, bringing together representatives of major US crypto companies, including Gemini, Robinhood, MicroStrategy, etc., to jointly discuss the regulatory framework, market growth, and the government’s role in the development of digital assets, indicating that the US government is seeking to gain a more favorable strategic position in the global crypto market.

As of March 2025, the U.S. government has become the largest known holder of Bitcoin globally, with an estimated holding of about 200,000 BTC, which may have a profound impact on the future development of the global Bitcoin market and other digital assets.

Countries with a large amount of Bitcoin

1. El Salvador

   El Salvador became the first country in the world to adopt Bitcoin as its legal tender in 2021. However, despite President Nayib Bukele’s active promotion of BTC adoption, studies have shown that the actual usage of Bitcoin in the country is low. In January 2024, the government further adjusted its policies, weakening Bitcoin’s role in tax collection and national bill payments. Currently, the Salvadoran government holds approximately 6,088 BTC, valued at around $558 million.

   
   El Salvadoran law allows domestic goods and services to be priced in Bitcoin (Image source:https://chinese.aljazeera.net/economy/2021/9/9）

2. Central African Republic (CAR)

   The Central African Republic declared Bitcoin as legal tender in 2022, becoming the second country in the world to take this step. However, the specific size of the country’s official Bitcoin reserves has not been disclosed, and there are doubts about its adoption in the market.

3. Bhutan

   Gelephu Mindfulness City in Bhutan formulated a cryptocurrency strategic reserve policy in January 2024, explicitly holding encrypted assets such as BTC and ETH. It is worth noting that Bhutan’s Bitcoin reserves mainly come from domestic hydroelectric mining, currently holding approximately 11,000 BTC, with an estimated value of about 1.1 billion US dollars, making it one of the most explicit emerging countries in terms of Bitcoin reserves globally.

4. China

   Despite the Chinese government’s ban on cryptocurrency trading, its law enforcement agencies have seized a large number of Bitcoins, mainly from Ponzi schemes and illegal financial activities. As of March 2025, the Chinese government holds approximately 194,000 BTC, valued at around $16.2 billion, making it the second-largest reserve after the United States.

Bitcoin vs. traditional reserve assets

In the global financial system, gold and oil have long been seen as representatives of traditional reserve assets, playing dual roles in value storage and energy security. However, with the acceleration of the global economic digitization process, Bitcoin is gradually entering the global reserve system.

In 2024, Bitcoin ushered in its fourth halving, reducing miners’ block rewards from 6.25 BTC to 3.125 BTC, further slowing down the supply growth of Bitcoin. The core objective of this mechanism is to control the speed of new coin issuance, maintain the scarcity of Bitcoin, and ensure its solid position as a long-term store of value. After this halving, Bitcoin’s annual inflation rate dropped to 0.9%, lower than the long-term supply growth rate of gold, further strengthening its uniqueness in the global asset system and giving it an edge over traditional reserve assets.

Bitcoin vs. Gold: a comparison of inflation rates (Image source: ARK Invest Big Ideas 2025.pdf）

Gold has always been an inflation hedge tool and a safe-haven asset in times of financial turmoil due to its physical stability, limited supply, and long-term market recognition. Oil, on the other hand, is a key component of the global energy system and an important part of strategic reserves for countries, typically used to address market fluctuations caused by energy crises or geopolitical conflicts. However, Bitcoin, with its characteristics of decentralization, censorship resistance, and high liquidity, has gradually become a new option for safe-haven assets amid increasing global economic uncertainty. It demonstrates greater flexibility in situations where international capital flows are restricted and financial markets are turbulent. Additionally, its transparent supply and strong programmability have continuously increased its acceptance in the global capital markets.

The competition between Bitcoin and traditional reserve assets such as gold and oil is not only a comparison of scarcity and store of value capabilities, but also a competition of market liquidity, global applicability, and future trends in digital economic development. In the future, Bitcoin may not completely replace the reserve status of gold or oil, but as its market maturity improves, it is expected to become an indispensable global reserve asset in various countries’ financial systems.

Risks of strategic reserves Bitcoin

Compared to gold or foreign exchange reserves, Bitcoin has extremely high historical price volatility. If a country holds a large amount of Bitcoin, once the market undergoes a severe adjustment, it may lead to a significant shrinkage of reserve assets, thereby affecting fiscal stability, and even triggering market panic.

Therefore, Bitcoin, as an asset with decentralized and non-sovereign properties, has fundamental differences from national fiat currency systems. If Bitcoin becomes a strategic reserve asset for major economies, it could weaken the central bank’s control over monetary policy and to some extent affect the credit system of fiat currencies. At the same time, the highly speculative nature of the Bitcoin price in the market may also pose challenges to a country’s foreign exchange reserves and financial stability.

From a macro perspective, the strategic reserve of Bitcoin may further intensify financial competition between countries and trigger a global cryptographic ‘arms race.’ If major economies like the United States hoard Bitcoin on a large scale, leading to imitation by other countries and even viewing Bitcoin as a tool challenging the dollar system, it could affect the stability of the global foreign exchange market, trigger a re-adjustment of the international financial order, and exacerbate geopolitical risks.

In short, at present, the regulatory policies on Bitcoin are not yet unified among countries, and some countries still impose strict restrictions on encrypted assets. If the US Bitcoin strategic reserve system operates successfully, it may trigger international regulatory confrontation and increase the complexity of international financial cooperation. At the same time, it is also a major challenge for the government to ensure security, transparency, and compliance when managing Bitcoin reserves.

Bitcoin investment advice

As Bitcoin gradually gains national recognition, and its supply mechanism gives it anti-inflation properties, it is suitable as an asset allocation for long-term value storage. Investors can increase their asset exposure through Bitcoin ETFs, futures, compliant custody platforms, and other methods.

On the other hand, the Bitcoin market still has high volatility, greatly influenced by macroeconomics, policies, and market sentiment. It is suitable for trend trading combined with technical analysis and fund flows. At the same time, strict implementation of stop-loss and take-profit strategies is required, reasonable control of investment proportion, and avoidance of excessive risk of a single asset.

In the investment process, it is also necessary to pay attention to the opportunities brought by policy changes. You can use a dollar-cost averaging strategy, buy in batches and hold for the long term, and combine personal investment goals and risk tolerance to develop a scientific holding plan to ensure the stability and growth potential of the investment portfolio.

Conclusion

Bitcoin is gradually transitioning from a decentralized financial asset to a global strategic reserve asset. Its transparency and anti-inflation characteristics have led to its increasing influence in the global financial system. However, the establishment of a national-level Bitcoin reserve system is not without challenges, including uncertainties such as global financial competition, which may affect Bitcoin’s position in the future global economic landscape. For investors, Bitcoin’s outstanding long-term value storage attributes can be optimized through Bitcoin ETFs, futures, compliant custody platforms, etc., and combined with market trends and policy environment for scientific allocation, while maintaining rationality, focusing on macro trends, formulating a robust long-term investment strategy to cope with the volatility and opportunities in the crypto market.