President Donald Trump announced his administration will move to evaluate the creation of a “national digital asset stockpile” — making good on a promise to support the use of cryptocurrencies like bitcoin.
However, the executive order fell short of creating a strategic bitcoin reserve outright, as some crypto advocates had hoped.
The price of bitcoin briefly surged on the news, but fell back to daily lows as traders took stock of the move.
The idea of a strategic reserve of digital tokens like bitcoin has long been floated in cryptocurrency circles, but gained traction this summer, when both Trump and Robert F. Kennedy Jr., currently Trump’s nominee for Health and Human Services Secretary, discussed it at the annual Bitcoin conference.
Trump reaffirmed his intention to create a reserve in a CNBC interview in December, stating it was incumbent upon the U.S. to be a leader in cryptocurrency technology, especially relative to China.
Advocates have called for a reserve’s creation on the grounds that bitcoin is the new “digital gold.” Just as the U.S. holds gold reserves, crypto advocates say, the U.S. should own bitcoin as well.
“I think the world is moving to a bitcoin standard for money,” Brian Armstrong, the CEO of crypto group Coinbase, said in Davos this week according to Yahoo News. “Any government who holds gold should also hold bitcoin as a reserve.”
Hours before Trump’s order on Thursday, Republican Wyoming Sen. Cynthia Lummis, a longtime bitcoin advocate, released a statement upon her appointment to the chair of the Senate Banking Subcommittee on Digital Assets calling on the creation of a strategic bitcoin reserve, which she said would “strengthen the U.S. dollar” and maintain the U.S. as a financial innovator.
During his presidential campaign, Trump heavily courted the crypto community, which eventually became his largest donor group.
Along the way, he promised to make the U.S. “the crypto capital of the world,” and on the campaign trail said he would undo Biden-era restrictions and constraints on crypto activity.
Just prior to taking office, questions arose about the extent to which Trump intended to directly benefit from pro-crypto measures. Last Friday, he launched his own digital token, $TRUMP. Although, as a “memecoin,” the token has no intrinsic value, its price was rapidly bid up as investors quickly viewed it as a means for tracking the success of Trump’s presidential administration. Yet less than 48 hours later, Melania Trump, now the First Lady, issued her own coin, causing a substantial number of people in the cryptocurrency community, including previous Trump supporters, to criticize the launches as a means of personally benefiting from their positions.
When it comes to conflicts of interest, Trump is in largely unchartered territory. It is not clear if Trump owns any bitcoin directly — though Vice President J.D. Vance owned between $250,000 and $500,000 worth, according to disclosure forms. Trump voluntarily released an ethics document just before taking office that said he would limit his involvement in the Trump Organization while in office.
