BTC reserve establishment, from confiscated assets

The executive order specifies that the strategic BTC reserve consists of BTC obtained by the federal government in previous criminal or civil forfeiture proceedings. This means that the reserve is not acquired through market purchases, but by using existing assets.
The federal government currently holds about 200,000 BTC
Assuming this number is accurate (roughly in line with public data, the US government has indeed accumulated a large amount of BTC through law enforcement actions, such as the Silk Road case), the value of these assets at the current price (approximately $85,000 per coin, based on search results) is around $17 billion, accounting for about 1% of the total circulation of BTC (approximately 21 million coins). This is a quite substantial holding.
Promise not to sell for the next four years
The government has promised not to sell these BTC during Trump's term (2025-2029), which is equivalent to locking in this supply and reducing the possibility of market selling pressure.
Diss from the previous government's "selling at a loss"
This may be Trump's political rhetoric, implying that the Biden administration sold confiscated assets when the BTC price was low (similar incidents did occur in history, such as the 2014 US Marshals Service auction of Silk Road BTC). This statement is more of a political propaganda, but it also reinforces the commitment of 'not selling'.
 
Crypto Reserve Plan
In addition to the BTC reserve, there are plans to establish a more extensive reserve of crypto assets, also derived from fines and confiscated assets. This indicates that the policy is not limited to BTC and may include other mainstream cryptocurrencies (such as Ethereum, etc.).
Not actively buying cryptographic assets
The government has made it clear that it will not use taxpayer funds to purchase Bitcoin or other cryptocurrencies, which deviates from Trump's grand vision of making America the capital of cryptocurrencies during his campaign.
Fulfilling campaign promises?
During the 2024 election campaign, Trump mentioned his support for Bitcoin and the crypto industry, including the idea of ​​building reserves. This executive order partially fulfills the promise, but does not include active purchases or larger-scale financial support.
 
Market response and bullish/bearish analysis
The market's reaction to this policy is complex, with the price of BTC reportedly falling by about 5% to around $85,000, reflecting a short-term bearish sentiment. We can analyze it from the following perspectives:
Bullish factors
Lock the supply, reduce selling pressure
200,000 BTC (about 1% of the total supply) will not enter the market circulation within four years, which is good news for long-term holders (HODLers) and those who believe in the scarcity narrative. Historically, when the US government auctions BTC (such as 2014-2018), it often triggers market panic. This 'no-sell' commitment eliminates this risk.
The symbolic significance of policy signals
The U.S. government officially recognizes Bitcoin (BTC) as a strategic asset, which is a milestone. This may attract institutional investors to further enter the market and encourage other countries to follow suit (such as Japan, South Korea, etc., which may consider similar reserve plans).
Potential expansion of Crypto Reserve
If the types of encrypted assets that are not confiscated in the future increase (such as Ethereum, stablecoins, etc.), this may provide support for a broader encrypted market, indicating that the United States' attitude towards digital assets is shifting from "regulatory crackdown" to "strategic holding."
Bearish factors
No additional purchases, below expectations
The market may have previously expected the Trump administration to follow the example of companies (such as MicroStrategy) or countries (such as El Salvador) to directly purchase BTC to bolster reserves. The executive order explicitly states no money will be spent on purchases, shattering the illusion of "national endorsement buying," leading to disappointment among some investors.
Short-term selling pressure
The price drop indicates that some speculators may think that the policy is not strong enough, especially after the 'plunge' in the Asian market. This may be an immediate response to 'no new demand'.
Uncertainty four years later
The 'no selling for four years' is just a current government commitment, and the new government after the 2029 handover may change policies, this uncertainty may keep the market cautious.
 
Complexity of market sentiment
Investor sentiment divided:
Believing this is a long-term positive, the government holding coins itself is a victory for the encryption industry.
Critics were disappointed with the conservative strategy of 'not buying coins' and felt that Trump 'exaggerated'.
Overall, there is a contradiction between short-term bearishness (price down 5%) and long-term bullishness (supply lock-up).
In-depth Analysis: Policy Impact and Future Outlook
Compared to the strategies of other countries
Unlike El Salvador's direct purchase of BTC from the national treasury (currently holding about 5700 coins), the US strategy is more conservative, using existing assets rather than new investments. This 'zero-cost reserve' approach may be interpreted as cautious experimentation rather than a full-fledged bet on cryptocurrencies.
The impact of the dollar hegemony
Trump once mentioned during his campaign that BTC reserves could diversify the Exchange Stabilization Fund (ESF) to strengthen the dollar's position. However, not actively purchasing BTC means that this goal is more symbolic, and it is difficult to shake the dollar system in the short term.
Implications of regulatory environment
While building reserves, executive orders may be accompanied by regulatory reforms (such as 'clear market structure and asset classification' mentioned in search results). If future regulations become more friendly (such as relaxing restrictions on crypto companies), this could be a bigger positive.
Potential size of Crypto Reserve pool
If asset seizures continue to increase (e.g. cracking down on crypto crimes, hacker ransomware, etc.), the reserve pool may expand rapidly. However, as there is no proactive purchase, the growth rate depends on the results of law enforcement actions, leading to uncertainty.
Market expectations recalibration
Investors may need to adjust their expectations from "government buying in large quantities" to "passive holding + regulatory optimization". This may cause short-term fluctuations, but in the long run, reduced supply and policy endorsements may drive price recovery.
 
My judgment
Overall, this policy is short-term bearish and long-term bullish. Short-term bearishness stems from the market's disappointment with the 'government buying coins,' leading to speculative funds exiting; while the long-term bullishness comes from the certainty of supply lock-in and the strategic recognition of crypto assets by the United States. The current price decline may be an emotional reaction rather than a deterioration of the fundamentals.
I believe this reflects the immediate sentiment of the Asian market waking up, especially when BTC is running at high levels, any unexpected news may trigger a pullback. However, from a broader perspective, this is still a milestone for the cryptocurrency industry - the US government's stance on holding coins may set a benchmark for the world, and the next four years will be a critical window to observe its implementation effects.
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