Bitcoin’s price saw a decline on Thursday, dropping approximately five percent to $85,000, before making a recovery overnight. This was in response to President Donald Trump’s announcement of a long-anticipated ‘Strategic Bitcoin Reserve,’ which will be funded with bitcoins that the federal government has seized through criminal and civil asset forfeiture processes.
Many industry advocates have called for the government to take a more active role in purchasing Bitcoin, a possibility that remains on the table according to the executive order. The White House has indicated that the commerce and treasury secretaries “are authorized to develop budget-neutral strategies for acquiring additional bitcoin, as long as these strategies do not impose any additional costs on American taxpayers.”
Additionally, a separate ‘US Digital Asset Stockpile’ will be established to hold non-Bitcoin cryptocurrencies, which will only increase through forfeiture proceedings.
Bloomberg reports that the US currently possesses approximately $16.4 billion worth of Bitcoin and around $400 million worth of seven other digital assets. Earlier this week, Trump hinted at the plan on social media, leading to a surge in prices by suggesting that the reserve would include Bitcoin, Ether, XRP, Solana’s SOL token, and Cardano’s ADA.