🔮 Reserved?
Can Donald Trump Force the US Government to Buy our Coins?
The Strategic Bitcoin Reserve is here.
Or at least the committee that may eventually recommend creating it.
Last Thursday, Trump signed an executive order to “Strengthen American Leadership in Digital Financial Technology,” the administration’s first policy move on crypto.
The committee established a digital asset working group tasked with reviewing existing regulations and evaluating the creation of a long-awaited US crypto stash.
Two charts tell the story of how this played out on Polymarket:
On inauguration day, the market saw nearly 50% odds for Trump to establish a national BTC reserve in his first hundred days, an idea he first teased at a Bitcoin conference in late 2024.
But these odds tanked on January 20th, when there was no day-one action on crypto and no mention of it in the inauguration speech.
At the same time, odds have risen for a US Bitcoin reserve to be set up sometime in 2025 (🔮51% odds).
What’s In The Box?
There are different visions for what the government may do with crypto under Trump:
Donald Trump. At the Bitcoin Nashville conference, Trump embraced crypto with this line:
"If I am elected it will be the policy of my administration...to keep 100% of all the Bitcoin the U.S. government currently holds or acquires into the future...This will serve as the core of the strategic national Bitcoin stockpile.”
But this position had evolved by January, with The Block reporting that the stockpile may now include a basket of US-issued coins, including USDC, a stablecoin representing tokenized US dollars.
Cynthia Lummis (R-WY) is the most pro-crypto sitting Senator, and her bill, the BITCOIN Act of 2024, goes beyond what Trump has called for. According to its official summary:
The Treasury must purchase one million BTC over five years
All BTC must be held for at least 20 years unless used to retire federal debt
Treasury to establish a Strategic Bitcoin Reserve for storage of US Bitcoin.
The bill reduces the total amount of US dollars Federal Reserve banks may hold in surplus and requires Federal Reserve banks to use part of their earnings to buy Bitcoin.
Market Rules. On Polymarket, the cryptocurrency reserve markets will resolve “yes” if BTC is held in the reserves of the US government, and the rules state, “the US government confiscating Bitcoin does not count as holding Bitcoin reserves.”
This makes clear that the Trump plan of not selling Bitcoin or other seized assets is not sufficient; the coins must be held in “reserve” status, a position akin to the foreign currency reserves managed by the Treasury or the gold at Fort Knox.
Market Reaction
Judged by the Polymarket rules, Trump’s executive order contains a good deal of ambiguity. It does not mention Bitcoin, or any other crypto asset by name. And it does not mention reserve status, instead calling for the study of a “digital asset stockpile.”
The committee established by this executive order, the President‘s Working Group on Digital Asset Markets, will be chaired by David Sacks, an investor in Solana, one of the American-made coins reported to be under consideration.
The initial response to the executive order is mixed - the wider crypto community sees Trump’s embrace as a win for the industry while Bitcoiners are annoyed that other coins have crashed their party.
Others have noted a distinction between Bitcoin, which has an anonymous founder(s), and others like XRP that are issued by private companies.
The market is highly skeptical that any of these other coins will make it into US reserves this year:
🔮21% odds US holds Solana in reserve in 2025
🔮16% odds US holds XRP in reserve in 2025
What Does This Mean For Our Bags?
Whether reserve or stockpile, Trump’s executive order has created optimism around Bitcoin price targets for 2025.
The highest upside case would be the Lumis scenario, which would require the reserve to have 1,000,000 BTC. This would come from hodling the ~200k already-seized coins, and buying 800k more in equal parts over the next four years.
If the US becomes a legally-mandated buyer of Bitcoin, this could have a monumental impact on the price as whales rush to frontrun the purchases.
The above chart shows the Polymarket probability distribution for Bitcoin’s price in 2025. Even with the overnight price dump, which seems to be related to the Chinese AI model DeepSeek hitting tech across the board, the odds still remain skewed to the upside:
🔮28% chance for BTC to double to $200k this year; vs
🔮22% chance BTC is cut in half to $50k
What We’re Watching
The collapsing odds for a US BTC reserve in the first 100 days point to significant hurdles that remain. The key factors:
Personnel. The biggest tell that Trump is serious about crypto is his personnel choices. From tapping Lutnick and Bessent for economic policy roles; to Sacks and RFK Jr. (who called for the US to buy up to 4m BTC during the campaign), Trump has stacked his administration with crypto bulls.
Congress. Matthew Sigel of Van Eck has argued that Trump could establish the reserve without consulting Congress, but this is a minority view. Nic Carter has reported that a law to hold BTC in reserves would be “a complete non-starter in Congress.” While some of the biggest crypto haters lost their seats in November, only 13 of the 535 members of the new Congress owned crypto according to recent filings.
Timeline. Last week’s order gives Trump’s crypto committee 180 days to submit a report, which leaves less than half the year to actually launch the reserve. If an act of Congress is ultimately required to establish the fund, six months is a blink of an eye.
On top of this, there’s still no consensus on the major questions of the policy: buy vs hodl, reserve or stockpile, and which coins will be included.
Despite the hurdles, crypto is in a place today beyond the dreams of even the most wide-eyed bulls a year ago: a pro-crypto president who has stocked his team with like-minded officials. At the moment, the market seems to be weighting this factor more heavily than any potential hiccups in Congress.
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I think this is much farther down the list of priorities than crypto bulls would like. Even if they come to a consensus after half a year, actually passing a bill will take longer. I don't see it happening in 2025, if at all.