The U.S. government already holds over 208,000 bitcoin, valued at more than $19 billion, but the process of retaining and managing that bitcoin is more complicated than it might seem.
The question of whether the U.S. government will establish a formal bitcoin reserve is closely tied to how the term “reserve” is defined. Does it simply mean the government will stop selling the bitcoin it currently holds, as former President Donald Trump proposed during his Nashville speech this summer? Or would it mean that the government begins actively purchasing bitcoin, as suggested by Senator Cynthia Lummis and Trump ally Robert F. Kennedy?
Currently, the government holds 208,109 bitcoin, all of which were acquired through seizures related to criminal activities. In the past, the government has sold off seized bitcoin in auctions. However, in July, Trump announced that under his administration, the U.S. would retain 100% of all bitcoin it holds or acquires in the future.
While this policy may sound simple, its implementation is far from straightforward. There is no clear established procedure, and it would likely require coordination between several government agencies, including the Department of Justice, the U.S. Marshals Service, and the U.S. Treasury.
“We don’t have anything in writing. We’re just kind of going by a speech that was rather generic,” said Perianne Boring, founder and CEO of The Digital Chamber, a crypto advocacy group. “Can you just move money between the federal agencies like that? I don’t know.”
Boring also raised the point that transferring bitcoin from the Department of Justice to the Treasury as part of a strategic Bitcoin stockpile could require congressional action. “But again, I don’t know exactly how much [Trump] can do with his executive powers,” she added.
Moish Peltz, a partner at Falcon, Rappaport, and Berkman, noted that the rules surrounding seized bitcoin could vary depending on how the bitcoin was initially seized and could differ from department to department. “Some portion of the seized bitcoin might need an act of Congress, but not necessarily,” he said.
Additionally, the process of establishing a bitcoin reserve could evolve gradually. “The government’s existing experience with the seizure and custody of large amounts of Bitcoin demonstrates competency, and it’s easy to imagine that from a technical perspective, there would be relatively low difficulty in establishing a strategic reserve,” Peltz said. “Over time, this could evolve into a more significant stance as regulatory clarity improves, legislation is enacted, and the government develops a more comprehensive digital asset strategy.”
Another vision for the reserve involves the U.S. actively purchasing bitcoin. Senator Lummis has proposed a bill in which the U.S. government would sell a portion of its gold reserves to buy 1 million bitcoin. At current prices, this would cost the government at least $90 billion, though if the bill were passed, it’s likely the government would face competition in acquiring bitcoin before it could purchase such a large amount.
Peltz suggested that an executive order could kick-start the process, but significant financial commitments would typically require congressional approval to allocate funds and establish a legal framework.
Boring was optimistic about the bill’s potential passage, especially with Republicans set to take control of the House of Representatives and the White House. “It’s absolutely possible to get it done,” she said, though she noted that it was unlikely the bill would pass in the first 100 days of the new Congress.
However, Nic Carter, a partner at Castle Island Ventures, was less confident. After meeting with Congress members and the Federal Reserve, Carter noted that other congressional priorities, such as passing a stablecoin bill and addressing Operation Choke Point 2.0, are taking precedence. “The strategic reserve didn’t come up in any of the conversations I had,” he posted on X.
Could there be a legal way for the government to acquire bitcoin without needing Congress to act? Perhaps. Zack Shapiro, head of policy at the Bitcoin Policy Institute, recently argued that the Treasury might be able to acquire bitcoin through the Exchange Stabilization Fund (ESF), by purchasing bitcoin-denominated debt instruments.
Shapiro explained that once the debt matures, the counterparty would repay the debt in bitcoin, which would then be transferred to the Treasury. This method could allow the government to acquire bitcoin without directly buying it on the open market, potentially avoiding disruptions or price spikes that could result from large purchases.
Currently, Polymarket bettors assign a 30% chance that the U.S. government will hold bitcoin reserves between January and April 2025.
