💡 What is a Bitcoin Strategic Reserve?

Issue 157

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🙌 The Informationist takes one current event or complicated concept and simplifies it for you in bullet points and easy to understand text.

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Today’s Bullets:

• Overview of the New Reserve

• Bitcoin vs. Crypto Holdings

• Neutral Acquisition of Bitcoin

• Reaction vs. Reality

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Inspirational Tweet:

Finally! A Bitcoin Strategic Reserve has been officially created and announced. And Bitcoiners were so excited about the announcement that they…

sold the *snot* out of it!

Wait, what?

Why would they be selling on such great news? Or was the news actually not good? If not, what was the problem, and why was it taken so poorly by the market?

And could the market actually be wrong here?

All good questions and ones that we will answer here today, nice and easy as always.

So, grab yourself a nice big cup of coffee, and settle into your favorite comfortable chair for to unpack the Bitcoin government gobbledygook with this Sunday’s Informationist.

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On My Schedule

Before we start, a quick announcement of an appearance I’ll be making soon. It’s free and it’s going to be fun and full of signal. Here are the details!

Thinking about blending traditional investments and the Bitcoin revolution?

Sometimes Wall Street’s classic wisdom and the wild world of digital assets seem like two different universes. On March 21st, 9 AM – 12 PM PT, join me LIVE as we bridge these worlds. I’ll be joined by, a tax strategy expert, and SDIRA specialist and a bitcoin mining operator to explore how classic portfolio strategies can align with the Bitcoin revolution. We’ll dive into market trends, risk management, and the sweet spot between stability and innovation. Got questions? There will be a live Q&A to give you the chance to ask—how do you craft a resilient, forward-thinking portfolio?

Reserve your spot here and let’s decode the future of investing together.

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🧐 Overview of the New Reserve

If you’re wondering what all the talk about Executive Orders and Bitcoin Reserves is about, this past Thursday, President Trump signed an executive order establishing the Strategic Bitcoin Reserve (SBR).

But what is it and what are we talking about here?

To clear things up, let’s sort through it, piece by piece.

In the first paragraph, the order states:

As a result of its scarcity and security, Bitcoin is often referred to as “digital gold”. Because there is a fixed supply of BTC, there is a strategic advantage to being among the first nations to create a strategic bitcoin reserve.

And continues in paragraph 2:

It is the policy of the United States to establish a Strategic Bitcoin Reserve.

Awesome. What does that mean, though? Will the US be buying hundreds of thousands, or even a million bitcoin, as originally contemplated when this whole idea of a strategic reserve was initiated?

Well, not exactly. The order goes on to say:

…the “Strategic Bitcoin Reserve,” [will be] capitalized with all BTC held by the Department of the Treasury that was finally forfeited as part of criminal or civil asset forfeiture proceedings or in satisfaction of any civil money penalty imposed by any executive department or agency (agency) and that is not needed to satisfy requirements under 31 U.S.C. 9705 or released pursuant to subsection (d) of this section (Government BTC).

Huh?

Well, basically the US government will just hold the Bitcoin it seizes from illegal activities.

So no new buying mentioned yet. But…

Government BTC deposited into the Strategic Bitcoin Reserve shall not be sold and shall be maintained as reserve assets of the United States utilized to meet governmental objectives in accordance with applicable law.

No selling either.

And, it goes on to state:

The Secretary of the Treasury and the Secretary of Commerce shall develop strategies for acquiring additional Government BTC provided that such strategies are budget neutral and do not impose incremental costs on United States taxpayers.

Sweet. The govies can buy more Bitcoin if it’s “budget neutral,” whatever that means.

Don’t worry, we will get into that in a bit. But first, let’s take a peek at the current Bitcoin Reserve and visit this business of them creating a Digital Asset Stockpile, as the order also states:

It is further the policy of the United States to establish a United States Digital Asset Stockpile that can serve as a secure account for orderly and strategic management of the United States’ other digital asset holdings.

And there it is, the US will stock other coins, too.

Let’s dig into this next.

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🤨 Bitcoin vs. Crypto Holdings

First, how much Bitcoin does the US already hold in this newly established Bitcoin Reserve?

Well, it turns out quite a bit.

In fact, the US government currently holds approximately 200,000 Bitcoin on its balance sheet somewhere. All accumulated through the seizure of assets due to criminal investigations.

This Reserve is currently worth approximately $17.3 billion.

Not bad!

But it could have been more. Much much more.

How much, you ask?