Strategic Bitcoin Reserve
Friday March 7th, 2025 - Issue # 98
(Any views expressed below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.)
We just crossed the Rubicon.
Last night, Trump dropped an executive order that might go down as the most important moment in Bitcoin’s history. The U.S. now officially has a Strategic Bitcoin Reserve—a digital Fort Knox. And if that wasn’t enough, the Digital Asset Stockpile was also created to hold everything that isn’t Bitcoin. This is no longer theory, no longer a campaign talking point—it’s policy.
The details are even better than expected.
First, there’s the Bitcoin Strategic Reserve, which will be entirely funded by seized BTC—no taxpayer dollars involved. The U.S. government has sold roughly 195,000 Bitcoin over the past decade for a total of $366 million. If they had just held those coins, they’d now be worth over $17 billion. That’s how much it has cost American taxpayers not to have a long-term strategy. Now? The U.S. isn’t selling. The Bitcoin it holds (estimated at around 200,000 BTC) will be locked up. The treasury won’t be panic dumping at the bottom anymore. And the executive order also mandates a full audit of all digital assets in U.S. government possession—something that has never been done before.
Then there’s the Digital Asset Stockpile. Unlike the Reserve, this will hold non-Bitcoin crypto assets—things like Ethereum, Solana, XRP, and others that the government has seized over the years. But here’s the key difference: the U.S. won’t be actively acquiring more of these assets. They will manage them, but they won’t look for ways to accumulate them like they will with Bitcoin. That distinction is critical. Bitcoin is now the only digital asset officially recognized by the U.S. government as a reserve asset.
This is the moment we’ve all been waiting for.
Let’s be clear about how significant this is:
“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 means exactly what you think it means. Not only will the U.S. maintain its Bitcoin holdings, but the door is now open to acquiring more—without costing taxpayers a dime. That could mean anything from accepting Bitcoin for certain government services, using it in international trade agreements, or even encouraging mining operations to pay in BTC instead of dollars. This isn’t a sell-the-news event—it’s the beginning of a global arms race.
The Game Theory Has Officially Changed
It was never about “the U.S. buying all the Bitcoin.” That was never the end game.
But now that the U.S. is openly holding Bitcoin, here’s what happens next:
Other countries will follow. No sovereign wants to be left behind. This decision forces other governments to think about their own Bitcoin exposure.
Institutional capital now has no excuse. The "too risky" argument is dead. If the U.S. government sees Bitcoin as a legitimate strategic asset, why wouldn’t pension funds, insurance companies, and endowments do the same?
Fear of government dumping is gone. The biggest bear case—massive government sell-offs—is officially over. That Bitcoin is locked.
State-level Bitcoin reserves just became more likely. We’re already seeing Texas and Utah push reserve bills. How long before other states follow?
The probability of a Bitcoin ban is now exactly zero. Governments don’t ban things they own. They protect them.
This changes everything. Zoom out.
Institutional FOMO Begins Now
If you thought institutions were already interested in Bitcoin, just wait. I believe we are going to see some of the biggest balance sheet recalibrations of all time over the next 12-24 months.
If you recall, I’ve mentioned many times before that institutions like BlackRock will add their own Bitcoin ETFs into their other funds just as Fidelity did in Canada years ago…
"In portfolios that hold alternatives, we are adding a position in Bitcoin, funded from equities as an additional alternative asset with a fixed supply, with a potentially diversifying source of risk and return."
"The addition of IBIT to these portfolios as a diversifier are in line with the investment objectives of this model, as Target Allocation with Alts portfolios are designed for investors with a higher risk budget and growth target," a BlackRock spokesperson said to etf.com. New York-based BlackRock is the world's biggest exchange-traded fund issuer, managing more than $3 trillion in 438 ETFs.
Here’s a great resource BlackRock put out in December last year: Sizing Bitcoin in portfolios
Think about it—institutions have already been dipping their toes in. BlackRock, Fidelity, and others have been slowly accumulating and integrating Bitcoin products. But now? They have an implicit government endorsement.
Despite the historic nature of this move, Bitcoin sold off on the news. Why? Because short-term traders are short-term traders.
“The hardest thing about being a Bitcoiner is that you’re in the trade with a lot of delusional people.” - Nic Carter.
Zoom out. This will take time to digest. There will be sovereign accumulation that won’t be disclosed. There will be 13F filings (disclosures of ETF holdings as we saw the other week from Mubadala Investments) from sovereign wealth funds. And if the U.S. finds a way to build a serious position through “budget-neutral” strategies, watch out.
A few months ago, even the idea of a U.S. Bitcoin Reserve seemed far-fetched. Today, it’s law.
Surreal:
Bottom Line: The Endgame Has Begun
This is one of if not the most important development in Bitcoin’s history—there is now a U.S. Strategic Bitcoin Reserve—and more accumulation is possible.
Banks can custody Bitcoin and integrate it into the financial system.
The macro backdrop is getting there—rates are falling, liquidity is returning, and the institutions are here.
Meanwhile, retail is still asleep.
This is the beginning of the nation-state accumulation phase. We’ve been preparing for this moment for years.
Now it’s here.
Have a nice weekend.