How to understand Trump's signed "Hold, Don't Buy" Bitcoin strategic reserve?

By: Alex Xu

Just now, crypto and AI czar David Sacks tweeted that Trump has signed an executive order to establish a Strategic Bitcoin Reserve. The key points are:

1. The reserve will be based on existing BTC held by the federal government, with additional BTC seized in enforcement actions added to the reserve.

2. This BTC will not be sold (at least during Trump's term in office).

3. The government will not allocate new budget (i.e., "budget-neutral") specifically for purchasing BTC.

4. Trump has fulfilled his promise.

How should we interpret this news? I see several key implications:

1. This "Strategic Bitcoin Reserve" is not the same as Senator Cynthia Lummis’s proposed "Strategic Federal Reserve" bill at the federal level. The former can be directly established by the executive branch, while the latter requires congressional legislation. The current executive action does not include a dedicated budget for buying new BTC—any such purchases would require congressional approval. In contrast, Lummis’s bill aims to create a separate budget to buy 1 million BTC over five years, potentially funded by revaluing the U.S.’s existing gold reserves to expand the Federal Reserve’s balance sheet and provide Treasury funding for BTC purchases. When David Sacks says “the government won’t acquire other assets for the reserve,” it doesn’t mean the broader concept of a national Bitcoin reserve has suddenly shifted to relying solely on forfeited BTC without any direct purchases. That vision remains legislative, not executive.

2. Does this executive order mean Trump has fulfilled his "promise"? At the executive level, yes. His campaign pledged to establish a BTC strategic reserve (via executive action), form a dedicated crypto advisory committee, remove or pressure out SEC Chair Gensler, and ease regulatory burdens—all of which have largely been accomplished. However, in a broader sense, the full promise remains unfulfilled. During the campaign, Trump explicitly committed to building a federal strategic reserve and buying significant amounts of BTC—exactly what Senator Cynthia Lummis is pushing for through her congressional bill. That legislative effort is still ongoing.

3. Will Trump announce more positive developments regarding BTC reserves or other pro-crypto measures? Possibly. He is the keynote speaker at tomorrow morning’s (Beijing time) White House Crypto Summit. But as noted earlier, there is limited room for further executive action on BTC. The most extreme step would be directing the Treasury to use the Exchange Stabilization Fund (ESF) to purchase BTC. This fund already exists, does not require congressional approval, and is nominally intended to “stabilize the dollar exchange rate.” However, as I discussed previously in “A Brief Analysis of Trump Advancing National Reserves of SOL, XRP, and ADA,” Trump’s style favors low-cost, high-impact moves that generate headlines. He tends to avoid high-effort, high-resistance actions with limited upside and high risk. While using the ESF to buy BTC falls within his theoretical executive authority, such a bold move would be highly controversial, invite significant backlash, and could interfere with Senator Lummis’s legislative efforts—creating redundancy and political friction.

4. It’s important to recognize that Trump’s renewed presidency features an even more pronounced “madman persona.” Externally, he projects unpredictability, aiming to appear as a reckless actor willing to do anything, thereby gaining leverage in diplomatic negotiations. Domestically, he continuously tests boundaries through executive actions to expand presidential power—examples include using DOGE to massively downsize and furlough federal employees, or withholding congressionally approved budgets. He is actively pursuing a “unitary executive” doctrine, supported by a loyal cabinet and emboldened by the U.S. Supreme Court’s July ruling granting presidents absolute immunity from criminal prosecution for official acts. Therefore, if faced with strong backlash from the crypto community, Trump might backtrack and make even more extravagant promises—but their actual implementation would remain highly uncertain.

5. Although progress toward integrating Bitcoin into national finance has faced obstacles, the overall trend continues slowly forward. The key narratives to watch remain the advancement of formal federal reserve legislation and state-level Bitcoin reserve bills. See "Web3 Investment Memo, Feb 26: Key Updates on Bitcoin Reserve Legislation" for details.