US Strategic Bitcoin Reserves: A New Era in the Global Financial Order

On March 6, 2025, U.S. President Trump signed the executive order "Establishing Strategic Bitcoin Reserves and U.S. Digital Asset Reserves," and the next day convened a White House Crypto Summit. This initiative marks another significant milestone for the crypto industry.

U.S. Strategic Bitcoin Reserves: A New Financial Chessboard

From the perspective of the U.S. government, establishing a Bitcoin strategic reserve aims to strengthen and solidify America’s dominant position in the global financial system. The executive order clearly states that, although the U.S. government currently holds a significant amount of Bitcoin, it has yet to formulate relevant policies to fully realize the strategic value of these assets in the global financial system. To promote national prosperity, the U.S. must fully leverage the potential of digital assets rather than restrict their development.

The United States has established strategic reserves multiple times in its history, including:

1. Strategic Gold Reserves: The gold standard was implemented in the 19th century, President Roosevelt prohibited private possession of gold in 1933, and the Bretton Woods system was established in 1944 to confirm the international status of the US dollar, until Nixon announced the decoupling of the dollar from gold in 1971.

2. Strategic Petroleum Reserve: In 1974, the United States reached a petrodollar agreement with Saudi Arabia and other countries, and established the Strategic Petroleum Reserve in 1975. However, on June 9, 2024, the US-Saudi petrodollar agreement officially expires, and Saudi Arabia announced that it will not renew.

Less than a year after the end of the petrodollar system, the United States established a strategic Bitcoin reserve, highlighting that the consensus on Bitcoin as "digital gold" is already quite solid.

Strategic Considerations for U.S. Strategic Bitcoin Reserves

1. Consolidate the financial hegemony of the US dollar

For a long time, the US dollar has dominated the global financial system. However, with changes in the global economic landscape and the rise of emerging economies, the dollar's hegemonic position is facing challenges. Bitcoin, as a decentralized digital currency, has the advantage of breaking through geopolitical restrictions and achieving rapid global transactions.

The United States is expected to gain a strategic advantage in the cryptocurrency sector by strengthening the connection between the dollar and cryptocurrencies, and by being the first to establish a Bitcoin strategic reserve, incorporating the cryptocurrency market into the dollar settlement system, thereby consolidating the international status of the dollar in the new financial era.

At the cryptocurrency summit at the White House, Trump stated that establishing a Bitcoin reserve is like building a "virtual Fort Knox." At the same time, he mentioned that Congress is pushing for a regulatory bill on USD stablecoins and the digital asset market to ensure the long-term stability of the USD.

American companies have laid out key tracks in the cryptocurrency field: in asset issuance, traditional financial institutions are actively participating in RWA tokenization; in asset securitization, the scale of the Bitcoin spot ETF issued by traditional financial institutions in the United States is considerable; in asset trading and custody, a certain listed company is the main custodian of the ETF.

Currently, the most urgent task is to establish a clear regulatory framework that provides clear development boundaries for the cryptocurrency industry, avoiding overlapping, disorderly, and ambiguous regulations from multiple government departments.

2. A powerful tool against inflation

In theory, establishing a strategic Bitcoin reserve can hedge against inflation to a certain extent.

The total federal government debt of the United States has exceeded 36 trillion dollars, reaching a historic high. The ratio of debt to GDP continues to rise, reflecting that the growth rate of debt exceeds the growth rate of the economy. In 2024, the interest expenditure of the U.S. federal government will reach about 882 billion dollars, putting immense financial pressure.

Bitcoin, as "digital gold", is seen as a potential tool against inflation and to address national debt issues. Due to its fixed supply, Bitcoin is considered an ideal asset for hedging against inflation.

The reasons for establishing a strategic Bitcoin reserve also include: meeting the demands of financial innovation, gaining an advantage in global financial competition, and fulfilling Trump's campaign promises.

The Profound Impact on the Cryptocurrency Market

The actual impact of Trump's executive order

The key points of the executive order include:

1. Establish an office to manage the "Strategic Bitcoin Reserve" (SBR), with funds sourced from seized Bitcoins, and the Bitcoins deposited into the SBR must not be sold.

2. Establish an office to manage "American Digital Asset Reserve", responsible for managing other digital assets excluding Bitcoin.

3. The Minister of Finance and the Minister of Commerce need to formulate strategies to acquire more government Bitcoin without increasing the budget and taxpayer burden.

Currently, the U.S. government holds about 200,000 Bitcoins, all seized from criminal or civil cases. An executive order requires increasing Bitcoin reserves without adding to the taxpayers' burden, but specific strategies have not yet been clarified.

federal-level encryption-related legislation

The current federal-level cryptocurrency-related bills being promoted include:

• H.R.148: Protecting Individuals' Right to Self-Custody of Crypto Assets
• S394: Regulatory Bill for US Dollar Stablecoins
• HRes111: Resolution supporting blockchain technology and digital assets

Trump hopes to sign the USD stablecoin innovation bill (GENIUS Act) before the recess in August, but the community does not have high expectations for it.

State governments' strategic Bitcoin reserve legislation

In addition to the federal level, some state governments are also actively promoting the legislative process of strategic Bitcoin reserve bills, such as Arizona, Texas, New Hampshire, and Oklahoma. The content of the bills varies by state, for example, Oklahoma proposes to invest 10% of public funds in Bitcoin or large digital assets, while Kentucky proposes to invest up to 10% of surplus cash in large cryptocurrencies and approved stablecoins.

Overall, Trump's strategic Bitcoin reserve executive order is positive for the crypto market in the long term. The policy environment will remain friendly in the coming years. Although there are no large-scale accumulation plans on the funding side, proposals from various states, if passed, could lead to substantial investments. In terms of market supply and demand, the government's seizure of Bitcoin that cannot be sold will reduce selling pressure, while also potentially attracting more investors and institutions to pay attention to Bitcoin, and even prompting other countries to imitate the establishment of strategic Bitcoin reserves.

As Michael Saylor stated, the establishment of the United States' strategic Bitcoin reserves will become a turning point in the financial and geopolitical landscape of the 21st century, a moment that will surely be remembered by history.