The reserve will act as a long-term store of value for Bitcoin, funded by government-seized digital assets. Texas has also advanced its own Bitcoin reserve bill (SB-21), which, if signed into law, will make it the first US state to hold Bitcoin as a reserve asset. White House crypto czar David Sacks criticized past government Bitcoin sales, and argued that they cost taxpayers billions by failing to recognize Bitcoin’s long-term value.
White House Establishes Strategic Bitcoin Reserve
President Donald Trump signed an executive order to establish a Strategic Bitcoin Reserve and a US Digital Asset Stockpile, according to White House AI and crypto czar David Sacks. The reserve is designed to serve as a long-term store of value for Bitcoin, with initial funding coming from digital assets that were seized through criminal and civil asset forfeiture proceedings. Sacks described the initiative as a "digital Fort Knox" for cryptocurrency, and said that the government will not sell any Bitcoin placed in the reserve.
The executive order also created a separate digital asset stockpile, which will include non-Bitcoin digital assets held by the government. This initiative will ensure responsible stewardship of the government's digital assets under the Treasury Department. However, Sacks clarified that the government will not actively acquire additional digital assets beyond those that were obtained through forfeiture proceedings.
Before the signing of the order, Bloomberg reported that the White House was expected to announce a Bitcoin reserve at the March 7 White House Crypto Summit. One of the proposed plans included using government-seized crypto as the initial seed for the reserve. Trump later confirmed on his Truth Social platform that the digital asset reserve will include major cryptocurrencies like XRP, Solana (SOL), Cardano (ADA), Ethereum (ETH), and Bitcoin (BTC), with ETH and BTC serving as its core assets.
US Government crypto holdings (Source: Arkham Intelligence)
Data from Arkham Intelligence indicates that the US government currently holds close to $17.71 billion in seized digital assets, with 198,109 BTC making up the majority of these holdings at an estimated value of $17.87 billion. The government's second-largest crypto holding is Tether (USDT) worth around $122 million, which is followed by Ethereum (ETH) valued at over $119 million. However, Arkham’s data does not show any holdings of XRP, SOL, or ADA, despite Trump’s earlier statements regarding their inclusion in the reserve.
In addition to creating the Bitcoin reserve and digital asset stockpile, the executive order mandates a full audit of the federal government’s crypto holdings. According to Sacks, no comprehensive audit had ever been conducted before, making this a big step toward transparency in the government’s handling of digital assets.
Texas Senate Approves Bitcoin Reserve Bill
The Texas Senate also approved the Bitcoin strategic reserve bill SB-21 with a decisive 25-5 vote, which was a major step toward making Texas the first state in the US to hold a digital asset reserve. The bill was introduced by State Senator Charles Schwertner, and it aims to strengthen Texas' financial position by investing in Bitcoin, which he described as a valuable and scarce asset.
During the Senate debate, Schwertner argued that Bitcoin serves as a hedge against inflation, and compared it to gold rather than a competitor to the US dollar. He placed a lot of emphasis on the fact that the continuous expansion of the money supply has devalued the dollar, making alternative assets like Bitcoin a lot more attractive.
The bill still requires the governor’s signature to become law. If enacted, Texas will establish a strategic Bitcoin reserve. This move is part of the broader trend toward state-level adoption of digital assets. Initially, the bill focused only on Bitcoin, but in February, lawmakers revised the language to allow for the inclusion of other digital assets. This amendment was made after President Donald Trump’s executive order in January, which directed a commission to explore the feasibility of a federal digital asset stockpile.
US States considering Bitcoin (Source: Bitcoin Laws)
The push for state-level Bitcoin reserves is gaining a lot of traction across the US. Wyoming Senator Cynthia Lummis, who is a well-known advocate for Bitcoin, recently stated that states are likely to adopt Bitcoin reserves before the federal government due to fewer bureaucratic obstacles. At the Bitcoin Investor Week conference in New York, she pointed out that while her Bitcoin Act of 2024 has been introduced at the federal level, state initiatives like Texas’ SB-21 could move faster in setting a precedent for digital asset reserves.
Crypto Czar Blasts US Bitcoin Sales
White House crypto czar David Sacks also recently criticized the US government’s past sales of confiscated Bitcoin, and called it a strategic mistake that has cost taxpayers billions. In a social media post on March 6, Sacks revealed that the government generated $366 million from Bitcoin sales over the past decade, but if it held onto the assets, they would now be worth over $17 billion. He argued that the lack of a long-term strategy for Bitcoin has led to huge financial losses.
The issue of treating Bitcoin as a short-term trade was also pointed out by Joe Burnett, who is head of market research at Unchained. He said that Bitcoin’s real value comes from long-term holding rather than trying to time the market. His comments echoed the growing concerns in the crypto community over the government’s approach to handling digital assets. In January, the Department of Justice received approval to sell 198,000 BTC seized from Silk Road, which was a decision that got widely criticized for not considering Bitcoin’s long-term potential.
The debate over the government’s Bitcoin holdings intensified since Donald Trump’s election victory in November. Trump pledged to position the US as a leader in cryptocurrency and blockchain technology, including establishing a strategic crypto reserve with Bitcoin playing a central role. His administration’s stance has led to renewed discussions on how the government should manage its digital assets.
Sacks’ remarks came just before the White House’s first crypto summit, where more than 20 industry leaders were invited to discuss the country’s evolving digital asset policies. Some of the confirmed attendees include Ripple CEO Brad Garlinghouse, MicroStrategy founder Michael Saylor, and Gemini co-founders Cameron and Tyler Winklevoss. According to Sacks, the guest list was kept small to encourage a more focused discussion on digital asset strategies.
There was growing speculation that the White House may announce plans for a strategic Bitcoin reserve during the summit on March 7. Unconfirmed reports also suggested that the administration is considering reducing or eliminating capital gains taxes on Bitcoin and other crypto holdings. While no official confirmation has been given, Sacks indicated that industry representatives will meet with President Trump’s Working Group on Digital Assets to shape future policies.
