Trump Executive Order: Strategic Bitcoin Reserve | US Cryptocurrency, Digital Assets & Crypto Regulation

US president Donald Trump is continuing his blistering run with signing off executive orders. Early on Friday morning India Time, he declared the creation of a Strategic Bitcoin Reserve. The EO says that Bitcoin is the ‘original cryptocurrency’ and that there is a ‘strategic advantage’ in being among the first movers to create such a reserve. The strategic reserve will have other digital assets along with Bitcoin.

The reserve will be built on the basis of crypto and digital currencies already in the US federal treasury, part of seizures and forfeitures from legal cases. David Sacks, the crypto czar in the Trump administration, said in an X post that this move will not cost the taxpayers any money. He said that the US government holds around 200,000 Bitcoins but there has never been any auditing. This EO now mandates accounting for all the Bitcoins in the system. It also says that the US will not sell the Bitcoins, using it only as a strategic reserve. Neither will it buy any, instead collecting more via the forfeitures and seizures route.

The news of the strategic reserve didn’t go down too well with the crypto market, with Bitcoin itself losing 3% of its value. Other cryptocurrencies also shed some value. The reason for this is being attributed to two things. One, that the Trump administration will not buy Bitcoin to enlarge the reserve and two, the expectation in the crypto market was that the move will be bigger than it actually turned out to be. Neither were other coins, like Solana that Trump had earlier mentioned, included in the reserve.

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Will make the US bitcoin superpower

As early as July this year, Donald Trump laid out his cryptocurrency plans at bitcoin conference, saying that he will use bitcoins for reserve currency in the federal reserve – if he gets elected for a second term.

In October, he launched his own bitcoin and his campaign took donations in crypto. Once a crypto-sceptic, Trump was now being hailed as the “crypto-president”.

He’s now won his second term and cryptocurrency has gone a celebratory run. According to cryptocurrency market watcher Coindesk, the “Trump bump” for crypto’s market capitalisation sent it to $2.5 trillion.

On the day of Trump’s win, bitcoin hit a historic high of $75,000 per coin. Elon Musk-backed Dogecoin shot up by 18%, as did ether, which floated up 8%, taking crypto exchanges up with them. By early December, Bitcoin had hit its highest ever value of $103,332.

A large part of the soaring value of cryptocurrency comes as a payback of the industry’s support to candidates in the hotly contested US election. A New York Times report says that the industry spent as much as $130 million on candidates who were willing to take favourable positions on crypto. It quoted experts saying this was “The same NYT report says that Ohio’s Republican candidate Bernie Moreno got much as $40 milion from the crypto industry to run his campaign, mostly spent on political ads. He won by a fair margin.

The pay-off for the crypto industry is clearly quantified. Data from crypto advocacy group Stand With Crypto (https://www.standwithcrypto.org/) shows that in the House of Representative, 261 pro-crypto candidates won their races and 116 anti-crypto ones lost. In the senate, the number for each is 17 and 12. Its website shows that more than $200 million were donated for the industry to support candidates. 

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These developments had an immediate echo in India, where the industry is in an adversarial relationship with the government, which is very combative with regulation. Already lamenting a heavy tax on crypto transactions without clear regulations, there is a deepening fear that Trump’s policies will suck out users from Indian exchanges. Within hours of Trump winning the election, CoinDCX CEO Sumit Gupta had put out a string of tweets, essentially hoping that the Indian government will take note of the changes in the global crypto environment.

“The direct effects of Trump’s policies might not alter India’s regulatory environment right away. However, global sentiment and investor behaviour will be influenced, eventually reaching India,” he said in the thread. 

The Indian crypto market is valued currently at more than $6 billion and is expected to cross the 100 million user mark by 2025. Despite some major setbacks, the Indian crypto industry and exchanges have shown resilience, best shown by Binance restarting its operations despite facing very tough regulatory opposition. The government now needs to take Trump’s policy moves as a wakeup call and find the balance between rules and free enterprise. Otherwise, analysts say, it could be India’s loss in a game that it is already well ahead.