On March 6, 2025, U.S. President Donald Trump signed an executive order titled “Establishing Strategic Bitcoin Reserves and U.S. Digital Asset Reserves.” The following day, the White House held a Crypto Summit.

This marks another significant milestone for the crypto industry.

Bitcoin Enters the Strategic Arena: A New Move in U.S. Strategic Reserves

Let’s examine this from the perspective of the U.S. government. The purpose of establishing a strategic Bitcoin reserve is to strengthen and consolidate the United States’ dominance in the global financial system. The executive order makes it clear: “The U.S. government currently holds a significant amount of BTC, but no policies have been implemented to leverage the strategic value of these BTC in the global financial system. Just as managing national ownership and control over other resources serves national interests, we must harness—rather than restrict—the potential of digital assets to promote national prosperity.”

The U.S. has a historical precedent for strategic reserves, including:

Strategic Gold Reserves – In the 19th century, the U.S. operated under the gold standard, with the dollar’s value backed by gold reserves. In 1933, President Roosevelt signed Executive Order 6102, banning private gold ownership and mandating its confiscation and deposit into the Federal Reserve. In 1934, the U.S. passed the Gold Reserve Act, transferring gold reserves to the Treasury. In 1944, through the Bretton Woods system, the U.S. pledged to exchange gold at $35 per ounce, making the dollar the global currency. This system lasted until 1971, when President Nixon announced the end of the gold standard, leading to the collapse of Bretton Woods.

Strategic Petroleum Reserves – In 1974, the U.S. reached an agreement with Saudi Arabia and OPEC nations, requiring oil trade to be conducted in U.S. dollars, solidifying the dollar as the world’s reserve currency. In 1975, Congress passed the Energy Policy and Conservation Act, establishing the Strategic Petroleum Reserve (SPR). At its peak, the U.S. held nearly 700 million barrels of oil in its SPR, though reserves had declined to 350 million barrels by 2024. On June 9, 2024, the petrodollar agreement between the U.S. and Saudi Arabia officially expired, with Saudi Arabia announcing it would not renew the deal.

Additionally, the U.S. has maintained other strategic reserves, including uranium, rare earth metals, silver, and grain, though their impact has been less profound.

Less than a year after the end of the petrodollar system, the U.S. has now established a strategic Bitcoin reserve. This underscores the growing consensus around Bitcoin as “digital gold.”

Strategic Considerations Behind the U.S. Strategic Bitcoin Reserve

1. Consolidation of Dollar Financial Hegemony

For a long time, the U.S. dollar has dominated the global financial system as the primary currency for international trade and financial transactions. However, with shifts in the global economic landscape, the rise of emerging economies, and the reshaping of geopolitical dynamics, the dollar’s financial dominance is facing challenges.

As a decentralized digital currency, Bitcoin possesses unique advantages in global circulation. Its transactions are not controlled by traditional financial institutions or governments, allowing it to bypass geopolitical restrictions and facilitate fast, seamless global transfers.

If the U.S. strengthens the connection between the dollar, Bitcoin, and the broader crypto ecosystem while taking the lead in establishing a strategic Bitcoin reserve, it could secure a dominant position in the crypto space and integrate the crypto market into the dollar settlement system. This would further solidify the dollar’s role in international financial transactions, reinforcing U.S. financial hegemony in the new financial era.

As Trump stated at the White House Crypto Summit, establishing a Bitcoin reserve is akin to creating a “virtual Fort Knox” (Fort Knox being the U.S. facility for storing national gold reserves). He also mentioned that congressional lawmakers are pushing legislation to provide regulatory clarity for dollar-backed stablecoins and the broader digital asset market, ensuring the dollar’s long-term stability.

The pieces are set, and the momentum is building. While this may be the first public acknowledgment of such a strategy at the highest level, U.S. corporations have already positioned themselves in key sectors of the crypto industry:

Asset issuance – Despite ongoing concerns within the industry about the inability to achieve full trustlessness in the tokenization of real-world assets (RWA), Franklin Templeton has emerged as the largest traditional financial institution issuing tokenized U.S. Treasury bonds.

Asset securitization – Traditional financial giants, led by BlackRock, have issued U.S. spot Bitcoin ETFs, with total assets under management (AUM) exceeding $100 billion.

Asset trading and custody – Coinbase, a Nasdaq-listed company, serves as the primary custodian for Bitcoin ETFs.

What’s urgently needed now is a clear regulatory framework to protect the crypto industry from the kind of ambiguous suppression seen under the Biden administration and to eliminate the fragmented, overlapping, and disorganized regulatory oversight from multiple government agencies.

2. Bitcoin as a Tool to Combat Inflation

In theory, establishing a strategic Bitcoin reserve can serve as a hedge against inflation to some extent.

According to World Bank data, the U.S. M2 money supply curve from 1960 to the present is as follows:

The U.S. national debt curve is as follows:

The total U.S. federal government debt has surpassed $36 trillion, setting a new historical record. Additionally, the ratio of federal debt to GDP has been rising in recent years, indicating that debt growth is outpacing economic growth. Due to the expanding debt burden and the current high interest rate environment, U.S. federal interest payments reached approximately $882 billion in 2024, placing significant pressure on government finances.

Bitcoin, often referred to as “digital gold,” could serve as a potential tool to combat inflation and address the national debt crisis. Governments worldwide resort to monetary expansion to stimulate their economies, which leads to currency devaluation and inflation. Since Bitcoin has a fixed supply, it is considered an ideal asset for hedging against inflation.

There are multiple reasons driving the U.S. government to establish a strategic Bitcoin reserve. Beyond consolidating dollar hegemony and combating inflation, the push for financial innovation plays a key role—Bitcoin and blockchain technology present new opportunities for the financial sector. From a global financial competition standpoint, the executive order explicitly states that “the first country to establish a strategic Bitcoin reserve will gain a strategic advantage.” From the perspective of U.S. political interests, Trump is fulfilling his campaign promise. The influence of crypto-related interest groups within the Trump administration has grown significantly, shaping some government decisions.

The Profound Impact on the Crypto Market

Trump’s Executive Order Falls Short of Market Expectations

The key requirements in this executive order are as follows:

1. The Secretary of the Treasury must establish an office responsible for managing and controlling the custodial account of the Strategic Bitcoin Reserve (SBR). The funds for this reserve come from BTC confiscated in criminal or civil cases held by the Treasury Department. BTC deposited into the SBR cannot be sold.

2. The Treasury Department must establish an office responsible for managing and controlling the custodial account of the U.S. Digital Asset Reserve. This reserve consists of all digital assets held by the Treasury, excluding BTC. The Treasury is required to develop a responsible strategy for managing this reserve (without explicitly prohibiting sales).

3. The Secretary of the Treasury and the Secretary of Commerce must devise a strategy to acquire additional BTC for the government—without increasing the budget or imposing any additional costs on U.S. taxpayers. (How exactly will they acquire more BTC? That’s up to them to figure out…)

Currently, the U.S. government holds approximately 200,000 BTC, which were seized in criminal or civil cases. Trump’s directive requires the Treasury and Commerce Secretaries to find ways to increase BTC holdings without incurring costs for taxpayers.

However, this executive order fell short of market expectations. The crypto community had been anticipating a more aggressive stance due to another federal-level proposal: the “Bitcoin Act” introduced by Senator Cynthia Lummis, which proposed that the U.S. Treasury purchase 1 million BTC over five years and hold it for 20 years. This proposal was ultimately rejected, leaving the community disappointed.

Ongoing Federal Crypto Legislation Has a Neutral Market Impact

In the U.S., Presidential Executive Orders (EOs) and Congressional Legislation differ significantly. Unfortunately, recent Bitcoin-related legislation at the federal level has not successfully passed. However, there are three ongoing federal-level crypto-related bills:

• H.R.148: Keep Your Coins Act of 2025
• S.394: GENIUS Act of 2025
• H.Res.111: Expressing Support for Blockchain Technology and Digital Assets

Among them, H.Res.111 appears largely symbolic and lacks substantial content, making it unlikely to pass. The Keep Your Coins Act (H.R.148) aims to protect individuals’ rights to self-custody their crypto assets. Meanwhile, the GENIUS Act (Guiding and Establishing National Innovation in U.S. Stablecoins) is a regulatory bill for U.S. dollar stablecoins, setting licensing and reserve requirements for stablecoin issuers.

During the White House Crypto Summit, Trump expressed his desire to have a bill on his desk before the August recess, primarily referring to the GENIUS Act. However, the crypto community has little expectation for this bill, as it doesn’t seem to provide any meaningful benefits.

State-Level Strategic Bitcoin Reserve Bills Show Promise

Beyond federal legislation, some U.S. state governments are actively advancing Strategic Bitcoin Reserve Act proposals. States such as Arizona, Texas, New Hampshire, and Oklahoma are pushing forward with legislative efforts to establish state-level Bitcoin reserves. However, five states have already rejected similar proposals, including Montana, North Dakota, South Dakota, Pennsylvania, and Wyoming.

The legislative process for establishing Strategic Bitcoin Reserves at the state level in the U.S. typically follows these steps: Drafting and Submission – A state legislator or committee drafts and submits the bill to the state legislature. Voting Process – The bill must pass through both chambers of the state legislature (House and Senate) via voting. Governor’s Approval – If approved by both chambers, the bill is sent to the state governor for signing into law. Below is the ongoing legislative process in Arizona for the Strategic Bitcoin Reserve Act:

Each state’s Strategic Bitcoin Reserve bill varies in content. For example, Oklahoma proposes allowing the state government to invest 10% of public funds in Bitcoin or any digital asset with a market capitalization exceeding $500 billion. Meanwhile, Kentucky proposes investing up to 10% of surplus cash in cryptocurrencies with a market capitalization of over $750 billion and stablecoins that have received proper regulatory approval.

Overall, Trump’s Strategic Bitcoin Reserve executive order is undoubtedly a long-term positive. In terms of policy, as long as Trump’s executive order remains consistent, the policy environment will be favorable for at least the next few years. From a funding perspective, while there is no plan at the federal level to accumulate millions of BTC, state-level proposals, if passed, could lead to actual capital investments. From a market supply and demand perspective, on the supply side, Bitcoin seized by the U.S. government would be deposited into the Strategic Bitcoin Reserve and would not be sold, reducing selling pressure in the market. On the demand side, the U.S. government’s decision to establish a Strategic Bitcoin Reserve could attract more investors to Bitcoin, including traditional financial institutions and large enterprises. This may alleviate concerns about entering the crypto space and could even prompt more countries to establish their own Strategic Bitcoin Reserves.

Ending

History will mark the moment the U.S. Strategic Bitcoin Reserve was established—a turning point in the financial and geopolitical landscape of the 21st century.

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