According to Jinshi News, David Sacks, the cryptocurrency chief at the White House, revealed that Trump has signed an executive order to establish a strategic Bitcoin reserve. This reserve will be funded with Bitcoin owned by the federal government, which has been confiscated through criminal or civil asset forfeiture procedures. Apart from assets acquired through asset forfeiture procedures, the government will not purchase additional assets for this reserve.
The government will not sell any Bitcoin deposited in the reserve. The Secretary of the Treasury and the Secretary of Commerce are authorized to develop strategies to maintain budget neutrality while acquiring more Bitcoin. The executive order also establishes a U.S. digital asset reserve. Sacks further stated that the premature sale of Bitcoin by the U.S. government has already cost American taxpayers over $17 billion in value. The U.S. government holds approximately 200,000 Bitcoins, and this executive order mandates a comprehensive audit of the digital assets held by the federal government. The federal government will now formulate a strategy to maximize the value of its Bitcoin holdings.
Meanwhile, on March 7, Arkham officially stated that BlackRock has again purchased Bitcoin two days later, currently holding $51.9 billion in Bitcoin. On-chain data shows that BlackRock withdrew 100.284 BTC from Coinbase Prime an hour ago. On March 7, Coinbase executive Conor Grogan posted on social media, estimating that the U.S. government holds 198,109 Bitcoins. This executive order is expected to reduce about $18 billion in sell-off pressure. However, according to data from the OKX trading platform, the overall cryptocurrency market showed a downward trend before and after the announcement by David Sacks, with Bitcoin declining by approximately 3.4%.
Will this accelerate other countries’ adoption of Bitcoin as a reserve asset? Will it promote a race for cryptocurrency reserves among other countries? What unprecedented security challenges might maintaining a reserve of over 200,000 Bitcoins (valued at approximately $17 billion) bring? Could this make the U.S. government a target for state-sponsored hackers? If such incidents occur, what impact would they have on the cryptocurrency asset market? What tokens are predicted to smoothly enter the cryptocurrency strategic reserve next? What are the main challenges for entering the cryptocurrency strategic reserve?
In response to these questions of concern for cryptocurrency market investors, CoinWorld inquired with “AI experts.” Below are the AI “experts'” responses.
**Question 1:**
How will the establishment of a Bitcoin reserve by the government affect institutional investors’ perception of Bitcoin as “digital gold”? Will this accelerate other countries’ adoption of Bitcoin as a reserve asset? Will it promote a race for cryptocurrency reserves among other countries?
**AI Expert:**
The U.S. government’s establishment of a strategic Bitcoin reserve is likely to significantly enhance institutional investors’ recognition of Bitcoin as “digital gold.”
On March 7, 2025, the United States announced that it considers Bitcoin a means of value storage and committed to not selling its approximately 200,000 Bitcoins. This move essentially affirms Bitcoin’s scarcity and long-term value—traits that align closely with gold’s historical role in the financial system. For those institutional investors who have always viewed Bitcoin as speculative or highly volatile (such as hedge funds, pension funds, and asset management firms), this policy may eliminate their doubts, marking a turning point in Bitcoin’s acceptance of sovereign legitimacy.
However, this change in perception also depends on the execution of the plan. If the upcoming audit reveals management issues, it could dampen market enthusiasm. Therefore, the premise is that the government can credibly implement the plan, starting with transparency in audits.
Countries with significant confiscated Bitcoin, such as the UK or Germany, may emulate the U.S. by converting illicit proceeds into strategic reserves. Central banks in developed economies, such as Japan and EU member states, may proceed more cautiously, waiting for regulatory frameworks and market stability to become clearer. The U.S. budget-neutral strategy may inspire other countries to adopt innovative acquisition methods, such as partnerships with mining operations or accepting Bitcoin for debt repayment. If the U.S. reserve can stabilize Bitcoin prices and reduce volatility (the biggest obstacle for risk-averse governments), the pace of global adoption may accelerate.
**Question 2:**
The executive order mandates a comprehensive audit of the federal government’s digital asset holdings, which has never been done in full before. In addition to Bitcoin, the U.S. digital asset reserve also plans to include other confiscated digital assets. How is the government expected to handle the diversity of these assets (such as Ethereum, stablecoins, and even NFTs), and what technical challenges or regulatory hurdles might arise in managing such a diverse portfolio under the leadership of the Treasury?
**AI Expert:**
Given the diversity of digital assets, the Treasury may initially categorize them by type, with Bitcoin as the core asset (given its prominence in the executive order), and manage other cryptocurrencies like Ethereum similarly, focusing on secure storage and market valuation. Stablecoins (like USDC and USDT), designed to maintain stable value, may be treated as cash equivalents and require regular audits to verify their backing, similar to practices in the private sector. NFTs, representing unique digital items such as art or collectibles, may be classified as collectibles rather than actively traded assets due to their illiquidity and subjective valuation.
To manage storage, the government may utilize institutional-grade custodians, as evidenced by its 2022 expansion to host NFTs for iHeartMedia, showcasing its experience. Bitcoin and Ethereum require secure wallet infrastructure, potentially using cold storage to prevent hacking, while stablecoins may need integration with issuers like Circle for redemption. NFTs, stored on blockchains like Ethereum or Solana, require dedicated wallets supporting standards like ERC-721 and may need backups to mitigate platform failure risks.
The regulatory environment surrounding U.S. digital assets is uncertain, complicating portfolio management. The lack of a unified legal framework leads to differing asset classifications: the IRS views Bitcoin as property, while the SEC or CFTC may classify stablecoins as securities or currency equivalents, and NFTs blur the lines between goods and intellectual property. This affects ownership, taxation, and reporting. Increased Congressional oversight poses challenges, and budget-neutral requirements limit funding for new systems or personnel. If NFTs or other tokens are seen as less significant than Bitcoin, this could provoke political resistance and delay policy development. International coordination is also relevant; holding assets like Ethereum or stablecoins may intersect with global regulatory efforts, such as the EU’s MiCA framework, and if assets come from foreign confiscations, it may violate sanctions or trade rules.
**Question 3:**
What unprecedented security challenges might maintaining a reserve of over 200,000 Bitcoins (valued at approximately $17 billion) bring? Could this make the U.S. government a target for state-sponsored hackers? If such events occur, what impact would they have on the cryptocurrency asset market?
**AI Expert:**
Given the scale of the reserve and the geopolitical significance of the U.S. government, it is highly likely that the U.S. will become a target for state-sponsored hacking attacks. State actors, especially during periods of tension, may see hacking the reserve as a way to disrupt the U.S. economy, steal assets, or gain leverage. Historical experience shows that state-level hacking attacks occur between countries with strained relations, so this risk is indeed present.
The high-profile nature of the U.S. Bitcoin reserve, valued at up to $17 billion, could make it a target for hackers. Certain nations with advanced cyber capabilities may deploy sophisticated persistent threats, exploiting vulnerabilities to use this as a tool for international political maneuvering. To mitigate this risk, the government will need to implement state-of-the-art cybersecurity measures, including isolation systems for cold storage and regular security assessments, and the U.S. may collaborate with international cybersecurity coalitions. If the U.S. government’s Bitcoin reserve is hacked, it could have a significant impact on the cryptocurrency market, potentially leading to market volatility and a loss of investor confidence. The severity of the market impact will depend on the scale of the hacking attack, the amount of stolen Bitcoin, and the U.S. government’s response.
**Question 4:**
Recently, Trump stated that in addition to Bitcoin, he is promoting the inclusion of other cryptocurrencies into the strategic cryptocurrency reserve system, such as ADA, SOL, XRP, ETH, etc. What tokens are predicted to smoothly enter the cryptocurrency strategic reserve next? What are the main challenges for entering the cryptocurrency strategic reserve?
**AI Expert:**
Based on current market sentiment, dynamics, and discussions on social media platforms (such as X), the cryptocurrency community speculates that more tokens may join the reserve in the future. These predictions are inspired by community discussions and align with the U.S. government’s tendency to support domestically influential or utility-driven projects. Note that these predictions do not constitute investment advice and are for reference only. Below are tokens that may be included and their rationale:
**Hedera (HBAR)**
Reason: HBAR is frequently mentioned as a candidate token on social media, as it is developed in the U.S. (managed by a council comprised of American companies, including IBM and Boeing) and focuses on enterprise-grade blockchain solutions. Its high throughput and low fees make it attractive for practical applications, aligning with the utility goals of a strategic reserve.
Support: Social media posts suggest that HBAR has potential due to its alignment with U.S. innovation and governance.
**Stellar (XLM)**
Reason: XLM, developed by the U.S. Stellar Development Foundation, is designed for fast, low-cost cross-border payments, complementing XRP’s advantages. Its partnerships with financial institutions may make it a strategic asset for the Treasury.
Support: Online discussions speculate that XLM may be selected due to its payment-oriented utility and U.S. background.
**Avalanche (AVAX)**
Reason: AVAX, created by the U.S. company Ava Labs, offers a scalable and high-performance blockchain platform. Its ability to support customizable subnets and DeFi ecosystems may attract governments seeking multifunctional digital assets.
Support: It is viewed on social media as a technologically superior, U.S.-made token.
**Chainlink (LINK)**
Reason: LINK provides crucial oracle services for smart contracts and is foundational for blockchain interoperability. Its U.S. background (Chainlink Labs is headquartered in San Francisco) and extensive use in DeFi may make it a strategic asset.
Support: Online posts highlight LINK’s utility and its potential for inclusion in the reserve.
**Algorand (ALGO)**
Reason: ALGO, founded by MIT professor Silvio Micali in the U.S., emphasizes scalability, security, and decentralization. Its focus on institutional use cases and carbon-negative blockchain features may align with government priorities.
Support: Social media discussions regard it as a utility-driven competitor with a U.S. background.
The main challenges include:
Regulatory scrutiny may exclude tokens with unclear legal status, and only relatively decentralized and secure tokens may qualify. Tokens must demonstrate sufficient security to withstand state-level threats, with Bitcoin being the most compelling in this regard. Compared to Bitcoin, which is viewed as “digital gold,” tokens like ADA or SOL are more volatile and have weaker qualifications as a store of value.
Including speculative assets may undermine the stability of the reserve, and there are concerns on social media that such a “junk coin reserve” could lead to economic failure. Bitcoin extremists and some crypto leaders oppose including “altcoins,” believing it would dilute the reserve’s original intent. Projects like Ripple (a major donor to crypto PACs) lobbying could lead to bias toward vested interests, triggering accusations of favoritism.
The executive order restricts the reserve to confiscated assets, currently dominated by Bitcoin (approximately 200,000 BTC). Other tokens (like HBAR and LINK) are less frequently confiscated, and the order prohibits additional purchases without a budget-neutral strategy. Formulating such strategies (like exchanging confiscated BTC for other tokens) would increase complexity and political risks.
Of course, we cannot rule out the “radicality” of Trump’s administration’s crypto policies, which could weaken the aforementioned challenges.
CoinWorld states: The above text is generated with AI assistance, and its logical deductions and conclusions may contain biases; it is for readers’ reference only and does not serve as investment advice or basis. CoinWorld strives to verify the information, but does not take responsibility for the authenticity or accuracy of the content. If readers incur direct or indirect losses based on investment actions taken based on platform information, CoinWorld bears no legal liability.
