U.S. President Donald Trump signed an executive order on Thursday to establish a strategic bitcoin reserve, a day before meeting with executives from the cryptocurrency industry at the White House.
The reserve will be capitalized with bitcoin owned by the federal government that was forfeited as part of criminal or civil asset forfeiture proceedings, the White House crypto czar, billionaire David Sacks, said in a post on social media platform X.
Attendees at Friday's White House crypto summit expect the event to serve as a stage for Trump to formally announce his plans to build a strategic reserve containing bitcoin and four other cryptocurrencies.
Earlier this week, Trump announced the names of five digital assets he expects to include in this reserve, spiking the market value of each. The five are bitcoin, ether, XRP, solana and cardano, the president said.
It is not clear how such a reserve would work or how it would benefit taxpayers. Sacks said the federal government will have a strategy to maximize the value of its holdings in such a reserve, without offering details.
"The U.S. will not sell any bitcoin deposited into the Reserve. It will be kept as a store of value. The Reserve is like a digital Fort Knox for the cryptocurrency often called 'digital gold'," Sacks said.
Trump's executive order directed the secretaries of Treasury and Commerce to develop "budget-neutral strategies" for acquiring additional bitcoin that have no "incremental costs" on taxpayers.
There will also be a "U.S. Digital Asset Stockpile", consisting of tokens other than bitcoin, but the government will not add to the stockpile "beyond those obtained through forfeiture proceedings", Sacks said.
Bitcoin briefly tumbled more than 5% to below $85,000 following Sacks' post, and last changed hands at $88,109.
Trump's promise of a strategic reserve and expectations for easier industry regulation had seen the token surge to an all-time high at $109,071.86 in January.
"This is the most underwhelming and disappointing outcome we could have expected for this week," Charles Edwards, founder of Bitcoin-focused hedge fund Capriole Investments, wrote in a post on X.
"No active buying means this is just a fancy title for Bitcoin holdings that already existed with the Govt. This is a pig in lipstick."
Trump's moves to support the crypto industry, which spent millions of dollars backing him and other Republicans in the November elections, have drawn concern from some conservatives and crypto backers over giveaways to an already wealthy community and delegitimizing the digital currency industry.
Proponents argue that a reserve would help taxpayers benefit from crypto's price growth.
Sacks estimated the U.S. government owns about 200,000 bitcoin and premature sale of the cryptocurrency has cost the American taxpayer $17 billion. It was not clear how Sacks arrived at these estimates.
The president's support for the crypto industry has also sparked conflict-of-interest concerns. Trump's family has launched cryptocurrency meme coins, and the president also holds a stake in World Liberty Financial, a crypto platform.
His aides have said Trump has handed over control of his business ventures, which are being reviewed by outside ethics lawyers.
