Why did Trump create a US crypto-stockpile?
President Donald Trump’s decision to establish official government cryptocurrency reserves in the US has drawn criticism from industry watchers.
He has signed an executive order creating what he calls a Strategic Bitcoin Reserve as well as a Digital Asset Stockpile, which will consist of other forms of digital currency.
The funds will be stocked with coins forfeited to the federal government as part of criminal or civil proceedings.
White House AI and crypto tsar David Sacks likened them to a “a digital Fort Knox for the cryptocurrency”, drawing comparison to the Kentucky military base that stores a significant portion of US gold assets.
However, some crypto enthusiasts have criticised the government for not being bolder, while others have raised question marks about the lack of transparency over the process.
Sacks has ordered a full accounting of the federal government’s existing crypto reserves, which he estimated at 200,000 Bitcoin alone. That’s worth $17.5bn (PS13.6bn) at today’s prices.
Speaking to reporters at the White House ahead of a special crypto summit on Friday, Sacks said that it was a “real shame that we did not maximise value for the American taxpayer.” Charles Edwards, a Bitcoin and digital assets hedge fund, called Thursday’s announcement “a pig in lipstick” as a response to Sacks’ post on X.
Nonetheless, Charles Edwards of the Capriole Fund, a Bitcoin and digital assets hedge fund, called Thursday’s announcement “a pig in lipstick” in response to Sacks’ post on X.
“No active buying means this is just a fancy title for Bitcoin holdings that already existed with the government,” he said.
Trump’s executive order says that the Treasury and Commerce secretary will come up with strategies for acquiring more government Bitcoin, provided these are “budget neutral and do not impose incremental costs on United States taxpayers”.
That meant, Sacks told reporters, they are only “allowed to buy more if it doesn’t add to the deficit or the debt.” Jason Yanowitz, co-founder of crypto firm Blockworks agrees that a Bitcoin reserve is a good idea, but the inclusion of any other coin sets a terrible precedent and “makes little sense.” “
“Without a clear framework, we risk arbitrary asset selections, which would distort the markets and drive a loss of public trust,” he suggested.
Other analysts though have been more positive.
“This approach makes much more sense than buying the assets,” said Russ Mould, investment director at AJ Bell.
“It would surely be bizarre for the US to sell dollars to buy crypto, when the dollar is the globe’s reserve currency and therefore a source of enormous influence. The president will give more details at the White House’s first crypto summit. It is unclear if the planned reserve will face legal obstacles or require a congressional act. The reserve will only contain Bitcoin. Other cryptocurrencies will be stored in a separate stockpile. Canada has a maple syrup reserve. Canada has a maple syrup reserve.
Earlier this week, Trump revealed the names of five cryptocurrencies that he said he would like included in the strategic reserve.
The market prices of the five coins he named – Bitcoin, Ethereum, XRP, Solana and Cardano – swiftly jumped after that announcement.
Mr Yanowitz said the US government needed to be wary of being seen to pick winners.
“Ensuring transparency through independent audits and public reporting is crucial for fostering innovation instead of favouritism,” he said.
Additionally, Sacks said that each government department – including the intelligence agencies – will have to audit and “self-report” their own cryptocurrency holdings. The US government has not made any exceptions. “We will take that report in, and the Secretary of Treasury will then set up accounts within charging department. One for Bitcoin, and one for other digital assets,” said he.
Trump courted the cryptocurrency community aggressively during his presidential run. Joe Biden, the former US president, led a crackdown against crypto, citing fraud concerns.
