Trump Establishes Bitcoin Reserve Amid Declining Prices
President Trump has initiated a bitcoin reserve funded by seized assets, with a separate stockpile for non-bitcoin cryptocurrencies. This move led to a 4% drop in bitcoin’s value. Some industry experts raise concerns over the need for congressional approval for government bitcoin acquisitions, while others demand clear regulations. Support for related legislation remains low.
On March 7, 2025, President Donald Trump implemented a strategic bitcoin reserve alongside a separate stockpile for various other cryptocurrencies. The executive order mandates that the reserve will be funded through assets seized in criminal or civil cases. Additionally, the Treasury and Commerce secretaries are tasked with devising budget-neutral methods to acquire more bitcoin without incurring expenses for taxpayers.
The newly established digital-asset stockpile will include seized non-bitcoin cryptocurrencies; however, the government is not authorized to purchase further assets for this collection. Following the announcement, bitcoin’s price experienced a decline of approximately 4%, falling to $86,516—around 20% below its peak of $109,225 achieved on January 20.
While the crypto community sees this reserve as a beneficial initiative, some experts express concern that the government’s procurement of bitcoin may necessitate approval from Congress. Supporting this notion, Senator Cynthia Lummis has introduced a bill for a strategic bitcoin reserve, proposing to revalue US gold reserves as a means to finance bitcoin purchases without increasing taxes or national debt. Despite these efforts, there is a lack of substantial congressional support.
Industry professionals underscore the importance of establishing clear regulatory frameworks concerning government-held reserves. Analysts suggest that bitcoin’s value is likely to be shaped more significantly by trends in adoption and macroeconomic influences rather than the government’s bitcoin inventory.
In summary, President Trump’s establishment of a bitcoin reserve aims to utilize seized assets while avoiding direct taxpayer costs. However, the government’s direct involvement in bitcoin acquisition raises questions about congressional approval. Despite initiatives like Senator Lummis’s proposed bill, the legislative backing remains limited, and the impact of government reserves on bitcoin’s price is uncertain.
Original Source: www.proactiveinvestors.com.au
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