US President Donald Trump has made a groundbreaking move by signing an Executive Order to establish a Strategic Bitcoin Reserve (SBR), marking the first time a government program will hold BTC as part of its assets. The Reserve will be funded by Bitcoin already in government possession through criminal or civil forfeiture, ensuring that taxpayer money will not be directly used.
However, the market’s initial reaction to this news has been less than enthusiastic, with the BTC price dropping by more than -7% as traders were disappointed by the lack of immediate large-scale open-market purchases by the administration. Many had been anticipating the US government to enter the Bitcoin market in a big way, but the new Order seems to have dashed those hopes, at least for the time being.
One particular line in the Executive Order has caught the attention of market observers: “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.” This statement has sparked speculation about what “budget-neutral” actually means in practice.
Several prominent figures in the Bitcoin space have weighed in on potential ways the federal government could acquire billions of dollars worth of BTC without increasing deficits or requiring new Congressional funding. David Bailey, an insider from the Trump team and a key figure in shaping the President’s pro-Bitcoin stance, outlined possible funding sources including surplus funds from the Exchange Stabilization Fund (ESF), selling Special Drawing Rights (SDRs), and revaluing gold certificates.
Analysts at the Bitcoin Policy Institute (BPI) also suggest that the ESF, which currently holds an estimated $39-$40 billion in surplus, could be used for immediate Bitcoin purchases without Congressional approval. They also point to the possibility of an Act of Congress, such as Senator Lummis’ BITCOIN Act, which would allow the government to acquire Bitcoin in a budget-neutral manner.
BTC commentator Bit Paine highlighted the fact that the administration seems to have already planned out its strategy for acquiring Bitcoin, given the authorization granted to the Secretaries of Treasury and Commerce. He also pointed to Commerce Secretary Howard Lutnick’s significant BTC holdings and his company’s large stake in MicroStrategy, suggesting a bullish outlook on Bitcoin.
While the Executive Order provides one avenue for budget-neutral Bitcoin purchases, analysts like David Zell believe that congressional action will still be necessary. Congressman Nick Begich, a vocal BTC supporter, hinted at upcoming developments in collaboration with Senator Lummis to position America as a Bitcoin superpower.
As the Bitcoin market continues to react to these developments, it remains to be seen how the US government will navigate the acquisition of Bitcoin as a strategic reserve asset. At the time of writing, BTC was trading at $89,785.