Crypto betting and investing fans went wild back on March 6 when President Trump signed his executive order establishing the Strategic Bitcoin Reserve (and United States Digital Asset Stockpile). It is what is says on the tin: a big pile of crypto stashed away by the federal government, supporting the economy by providing a hedge against monetary instability.
At least that was the plan. When the White House issued their crypto policy report this past Wednesday, there was no mention of any further development on the Bitcoin reserve front. That was the big takeaway as far as crypto markets were concerned; the price of Bitcoin (BTC) has subsequently fallen from around US$118,000 on Wednesday to $114,497.01 as we go to press.
There are other reasons for Bitcoin’s short-term dip, perhaps none larger than the U.S. inflation rate rising from 2.4% in May to 2.7% in June. But that’s not what’s making news right now. As always, people are pushing that hot button instead, speculating on what the Trump Administration may or may not be hiding from us.
What’s the Strategic Bitcoin Reserve?
The executive order Trump signed created two funds:
- The Strategic Bitcoin Reserve, which will only contain BTC.
- The U.S. Digital Asset Stockpile, which will hold the alt-coins.
Both will be funded by crypto that the federal government has confiscated in criminal and civil forfeiture cases.
There’s been plenty of debate over these reserves. Some crypto enthusiasts, including billionaire Tyler Winklevoss, were concerned about the U.S. hoarding anything other than Bitcoin – which is why the Trump Administration ultimately created two separate funds. Others, including ING’s Padhraic Garvey, suggested there wasn’t much benefit in these reserves apart from Trump holding more influence over the markets.
As it turned out, the prices of Bitcoin, Ethereum (ETH) and Solana (SOL) all fell about 5% the day after Trump signed his executive order.
Again, there were other reasons for this; prices did ultimately rally, as crypto investors saw that steps were being taken to establish these digital coins as viable financial instruments. That optimism has now faded somewhat in the wake of Wednesday’s report, at least among a certain section of the public.
Who’s Upset With Wednesday’s Report?
There are two levels of disappointment in play here.
While some investors were still happy that Bitcoin was being mentioned at all, others, including Compass Mining’s CJ Burnett, said the White House created “unnecessary uncertainty” by failing to provide any updates on the Strategic Bitcoin Reserve.
Then you have that part of the MAGA wing who’s already upset with the Trump Administration over their lack of transparency in other areas – most notably the Epstein Files. Bitcoin influencer George Bodine lamented on social media that there has been no official audit of U.S. Bitcoin reserves.
According to yesterday’s report by Julie Binoche at The Currency Analytics, Freedom of Information Act (FOIA) documents only map to 28,988 BTC under federal control. However, it’s rumored they might be holding nearly 198,000 BTC. That was over $23 billion at the time of the report.
What About Ripple?
Are you one of those XRP whales Binoche identified in her article? If so, you took a long position on Ripple before Wednesday’s report came out, expecting more progress on the regulatory front. Some investors had a high target of $5.96 for the price of XRP; instead, the price went down after the report’s release, from around $3.12 to its current price of $2.99.
Not that you should be panic-selling at the moment. The longer term still looks bullish for XRP, BTC and pretty much every major digital coin on the market. But if you were looking for short-term gains for your crypto portfolio, let’s hope you were betting the dark side instead – and that you’re picking the right time to cash out.
