With all the crypto-friendly policies coming from the US lately, you’d think that the crypto market would be rallying like crazy, but well, it isn’t. The lackluster price action we’ve seen lately has many people wondering if things like Trump’s crypto reserve are actually bullish or if they’re just a big old nothingburger. And that’s why today, we’re going to do a deep dive into these announcements and tell you how they could affect the crypto market, if at all.
Trump’s Achievements in Crypto Policy
Appointing Crypto-Friendly Officials
Before diving into the specifics of the Bitcoin strategic reserve and what it could mean for Bitcoin, it’s important to quickly take stock of what Trump has managed to achieve so far. As it happens, Trump has already fulfilled a number of promises he made during his campaign. Immediately after reclaiming his old office, Trump selected David Sachs to be the White House’s first-ever crypto and AI ZAR.
For those unaware, David is a member of the so-called PayPal mafia along with Elon Musk, who leads the Department of Government Efficiency or DOGE. Trump then nominated pro-crypto individuals into key regulatory positions, including:
- Paul Atkins as the chair of the SEC
- Brian Quentes as chair of the CFTC
- Travis Hill as chair of the FDIC
- Jonathan Gold as the chair of the OCC
Fulfilling Other Promises
Trump followed through on other promises, including the pardoning of Ross Ulrich on January 21st, the day after he was inaugurated. Additionally, the process of exposing and ending Operation Chokepoint 2.0 has been put into effect. This resulted in the FDIC releasing a whopping 790 pages exposing the calculated efforts of the regulators’ previous leadership to block the crypto industry from accessing banking services. Meanwhile, the OCC has since stated that it has a better grasp of the industry and has laid out guidance for crypto banking.
The Bitcoin Act
Elsewhere, Senator Cynthia Lamus is again proposing the Bitcoin Act, first introduced during Trump’s campaign last year, albeit with a few changes. These include allowing the government to potentially hold more than 1 million BTC, which was the soft limit previously set. Notably, the bill previously required that all cryptos forked from Bitcoin, such as Bitcoin Cash or Bitcoin Gold, must also be held by the government for at least five years unless authorized by law to transfer or sell. The changes now add that the commerce secretary must evaluate the assets based on market cap and retain the dominant asset.
Trump’s Executive Orders on Crypto
Establishing the Crypto Innovation Group
The announcement that had everyone talking was Trump signing two executive orders related to the crypto industry. The first of these was signed on January 23rd, just three days after Trump took office. This executive order establishes “an internal working group to make America the world capital in crypto.” This group consists of:
- US Treasury Secretary Scott Bessent
- Attorney General Pam Bondi (yet to be confirmed)
- SEC Chairman Paul Atkins (yet to be confirmed)
- CFTC Chairman Brian Quintes (yet to be confirmed)
- Other agency heads
This move also revokes a previous executive order set by former President Joe Biden, which labeled crypto as an inherent risk that needed to be managed through strict regulatory measures. Trump’s order also prohibited the establishment, issuance, circulation, and use of a CBDC and set out plans to create clear stablecoin regulations.
The Strategic Bitcoin Reserve and Digital Asset Stockpile
On March 7th, Trump signed a second executive order for crypto, this time establishing a strategic Bitcoin reserve and a digital asset stockpile. This executive order temporarily took the crypto industry by storm, but the hype died down almost as quickly as it erupted.
The Strategic Bitcoin Reserve
The strategic Bitcoin reserve will initially be made up of BTC previously seized by the US government and held by the US Treasury. According to David Sachs, the reserve will act as a “digital Fort Knox” for the cryptocurrency, specifying that it would be hodled indefinitely as a store of value.
Sachs highlighted the opportunity cost of selling too early. The US government previously sold around 195,000 BTC for approximately $336 million, but if they had held on to it, this BTC would now be worth tens of billions of dollars. The Treasury will work with other federal agencies to evaluate their legal authority to transfer any BTC they own into the reserve.
The Digital Asset Stockpile
Unlike the strategic Bitcoin reserve, the digital asset stockpile consists entirely of altcoins. Like the strategic Bitcoin reserve, it will consist of crypto previously seized from illicit activity. However, there are no plans to add to the digital asset stockpile except for altcoins seized from illicit activities in the future.
David Sachs noted that the digital asset stockpile is meant to provide “responsible stewardship of the government’s digital assets under the Treasury Department.” This move effectively places a regulatory label on the crypto assets already held by the government to bring them under jurisdiction.
The Crypto Summit and Market Reaction
The First Crypto Summit at the White House
Following the executive order on crypto reserves, Trump hosted the first-ever crypto summit at the White House. The roundtable included:
- David Sachs (Crypto Czar)
- Howard Lutnik (Commerce Secretary)
- Scott Bessent (Treasury Secretary)
- SEC crypto task force head Ha Pierce
- CFTC acting chair Carolyn Fam
- Crypto industry leaders like Michael Saylor and Brian Armstrong
Market Response
Crypto investors were eager for new announcements, but the summit mostly reiterated previous policies. The market reacted with a slight dip, feeling underwhelmed. However, there was a key standout: Scott Bessent underscored plans to use stablecoins to ensure the US dollar maintains its global dominance. This suggests stablecoins could become widely adopted as the de facto digital dollar, marking a huge leap for crypto adoption in the US and worldwide.
Is This Bullish or a Nothingburger?
Market Sentiment
The price action in the market has been unimpressive, likely because these announcements were already priced in. However, the market showed resilience instead of a major retracement, which can be seen as a bullish signal.
Future Implications
The regulatory landscape in the US is becoming increasingly pro-crypto. The strategic reserve announcements add legitimacy to BTC as a strategic asset, which could encourage institutional investment. Additionally, other countries might follow the US’s lead in holding Bitcoin as a reserve asset.
More clarity is needed regarding the digital asset stockpile. If the government confirms that it holds large amounts of top altcoins and decides to keep them long-term, this could be a bullish catalyst for altcoins.
Conclusion
While the short-term market reaction has been muted, the long-term outlook remains strong. The regulatory shifts, Bitcoin reserve, and stablecoin initiatives could significantly impact the global crypto market. As we move forward, all signs point to an eventual bullish phase in the crypto space.
