This time, it's surprisingly reliable. The executive order to establish a Bitcoin strategic reserve has finally been signed.
In simple terms, the U.S. law enforcement agencies have locked up 200,000 BTC (worth about $17 billion) that they have seized over the years, treating it as 'digital gold' to hold, and will never sell it in the future.
This move directly makes the U.S. government the largest Bitcoin whale in the world, reducing the circulating supply by 200,000 BTC, which will certainly provide support for the price in the long run.
However, there is a key point in this executive order: the Secretary of the Treasury and the Secretary of Commerce can adopt a 'budget-neutral' strategy to acquire more BTC.
What does budget-neutral mean? Simply put, it means not spending taxpayer money.
For example, using seized ETH or USDT to exchange for BTC in the market, or issuing Bitcoin bonds for others to buy, thus not increasing the fiscal deficit while secretly stockpiling.
It’s even possible that banks and funds will cooperate, using incentives to encourage private enterprises to hand over BTC, allowing the government to collect money passively. The room for maneuver here is quite large; it feels like the U.S. is about to start playing the 'asset swap' game.
But to be honest, the short-term market reaction is somewhat disappointing. As soon as the news broke, Bitcoin dropped from $90,000 to $85,000, with over 150,000 liquidations in 24 hours.
Why? Because everyone initially expected the U.S. government to directly spend money to buy, but instead, they just locked up the seized BTC, not seeing any real cash influx. Moreover, the executive order clearly states that any means of acquiring BTC other than seizures requires congressional approval, which is still a long way off.
However, in the long run, this could be a positive development. After all, the U.S. is treating Bitcoin as a strategic asset, and other countries may follow suit. At that point, global central banks may start hoarding BTC, and prices will naturally rise.
Furthermore, since the U.S. government won’t sell, the circulating supply decreases, increasing scarcity, providing peace of mind for long-term holders.
It's just unclear how long this 'strategic reserve' will last, considering Trump's term is only four years, and whether the policy can continue is still a question.
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