The Strategic Bitcoin Reserve is Here

Breaking news occurred last week when President Donald Trump signed an Executive Order making the Bitcoin Strategic Reserve in the United States official. The markets have responded by “selling the news.” Of course, the equities markets as a whole have all taken a hit over the past couple of weeks so this has not been Bitcoin-specific. Notably, the Magnificent Seven companies have specifically been hit hard. This is not a discussion about the current markets and why things are trending down, this is instead a discussion about the most important Bitcoin announcement since Bitcoin was created in 2009.

The leader of the free world and the free market has publicly declared that Bitcoin is legitimate and that we intend to be the leader in this emerging industry, technology, and innovation.

I aim to provide education and not provide specific financial advice but I must declare my opinion and perspective more severely than I typically do.

If you are someone who is selling Bitcoin at prices ~30% below a prior all-time high, after the leader of the free world has publicly announced support for Bitcoin, I do not have words to defend you. I cannot comprehend parting with your Bitcoin after this news.

Before the official announcement, people in the Bitcoin industry were concerned that alt-coins, better known as shit coins, would be grouped in with Bitcoin based on prior language conveyed by President Trump. I believe in my core, this would have been an extreme mistake. We don’t have a “strategic reserve” of American-made company stock and grouping alt-coins into a strategic reserve would have shown specific bias to specific tech companies which I do not believe is the role of the federal government.

To reiterate, I am of the belief every other cryptocurrency that has a board of directors, founder still in charge, was VC funded or had a “pre-mine” where people were given tokens ahead of a retail audience, or have a corporate structure, are not currencies, but rather speculative technology companies. Owning their token is not equal to owning money, but rather a piece of their company. The only reason you would hold one of these tokens is if you believed in the potential future return. This is undeniably different than holding Bitcoin which is not a company, has no marketing team or employees, and was freely mined by anyone who wanted to. Nonetheless, people were worried that the Trump administration would fail to see these differences and group all the tokens together.

When the announcement came, we got our answers. The Trump administration made a specific distinction, a line in the sand setting a precedent, stating there is Bitcoin and then there is everything else.

The Executive Order had two distinct entities. The first was the Strategic Bitcoin Reserve which places all of the Bitcoin already owned by the federal government (acquired through criminal or civil asset forfeiture proceedings and amounts to about 200,000 Bitcoin) into a reserve and specifically states that the US will not sell any Bitcoin deposited into the reserve. The specific language from the announcement is that the reserve “is like a digital Fort Knox for the cryptocurrency often called “digital gold.”

The second entity was establishing a “Digital Asset Stockpile” consisting of digital assets other than Bitcoin. Specific language from the announcement states, “The government will not acquire additional assets for the Stockpile beyond those obtained through forfeiture proceedings.” The announcement also included language indicating that the US government may sell these assets at a later date.

I have always viewed the bare minimum for a Strategic Bitcoin Reserve to be ensuring the Bitcoin already held by the US government is not sold. However, we didn’t just get the bare minimum, we received specific language on the future of our countries’ Bitcoin holdings. The announcement states, “The Secretaries of Treasury and Commerce are authorized to develop budget-neutral strategies for acquiring additional bitcoin, provided that those strategies have no incremental costs on American taxpayers.” For people who are capable of looking ahead into the future, this is potentially the most important signal in the history of Bitcoin. A Bitcoin reserve was created and specifically instructed the Secretaries of Treasury and Commerce to DEVELOP WAYS TO ACQUIRE MORE BITCOIN.

“Budget neutral” is a vague term and I initially had no idea where funding for these acquisitions could come from. Below are a few examples that could be enacted with 0 cost to any taxpayer in this country:

• The Exchange Stabilization Fund (ESF) — A $39 billion surplus sitting in the ESF

• Selling Special Drawing Rights (SDRs) from the IMF —The US holds $160 billion in SDRs

• Gold Certificate Revaluation —The US Treasury still values its 261.5 million ounces of gold at $42.22 per ounce. Repricing to current market prices could unlock ~$750 billion.

• Selling cheese —The US government holds 1.4 billion pounds of cheese in underground mines, worth roughly $2.5 billion at current market prices.

• Many, many, many other options…

Potentially billions of dollars could be redistributed straight into building up the digital real estate (Bitcoin holdings) of this country at the snap of a finger.

I understand people may have been let down that this executive order did not publicly state “We are buying X amount of Bitcoin today.” I maintain this was an unrealistic expectation based on how our government works and I still believe announcing a huge Bitcoin buy is counter to the best interest of our national security. Therefore, I found the specifics of the order extremely exciting and not at all a letdown because of the forward-looking language indicating and hinting that more Bitcoin will be acquired.

We also received a clear indication of how this administration feels about Bitcoin and everything else. Two different entities with two different sets of rules. One will be treated with the future interest of this country and its citizens in mind, and the other presumably will be used to benefit the first. Bitcoins and other cryptos are not the same. There is no second best and the United States knows that.

Five years ago I could not imagine the United States publicly supporting Bitcoin in this way.

In 2023 I debated if Bitcoin and crypto would be a discussion point for the election. In 2024 two of the three leading Presidential candidates gave speeches at the Bitcoin Conference.

In 2024, Bitcoin was backed by Wall Street to record-breaking success.

This year we have an undeniably pro-Bitcoin administration and have a Strategic Reserve in the first 100 days in office to show for it.

What will the next 5 years bring?

Read all of this again, go look at the price of Bitcoin, and decide what you think will happen.

Stack SATs.

The views and opinions expressed here are for entertainment purposes only and should, in no way, be interpreted as financial or investment advice. Always conduct your own research when making an investment or trading decision, as each such move involves risk. I am not a financial advisor and do not claim to be qualified to convey information or advice that a registered financial advisor would convey to clients as guidance. Nothing contained in this e-mail/article constitutes, or shall be construed as, an offering of financial instruments, investment advice, or recommendations of an investment strategy. If you are seeking financial advice, find a professional who is right for you.