Recently, the policy dynamics surrounding 'Bitcoin reserves' have been numerous: On March 6, Trump signed an executive order announcing the establishment of a Bitcoin strategic reserve; on March 8, Utah's 'Reserve Bill' passed both houses but deleted core provisions related to Bitcoin reserves; on March 11, Senator Lummis resubmitted the (Federal Strategic Bitcoin Reserve Bill) (this bill was first proposed in July 2024 but did not pass in the Senate committee). What signals do these policies convey? Why did the price not rise but fall after Trump established the strategic reserve?
The executive order signed by Trump on March 6 triggered a market downturn, essentially due to the market's confusion regarding the 'Bitcoin Strategic Reserve' policy. The current path the U.S. government is taking to promote 'Bitcoin reserves' can be broken down into three independent levels:
1. Presidential executive order (stock freeze)
- Core clause: Prohibit the sale of government-seized Bitcoin assets
2. Federal Strategic Reserve Bill (incremental mechanism)
- Policy vehicle: Senator Lummis's (Bitcoin Bill)
3. State-level reserve program (regional pilot)
- Representative case: Legislation by local governments such as Arizona
The market has a cognitive bias regarding presidential executive powers, believing that not purchasing$BTC reserves does not meet expectations, but in fact, this may already be the best solution Trump can offer at the administrative level.
Executive orders can only manage existing seized assets (about 200,000 coins$BTC ), as their authority is limited to the administrative functions within the existing legal framework and cannot touch upon adjustments to the legislative framework; while actively purchasing Bitcoin involves legal definitions of cryptocurrencies, fiscal budget authorizations, etc., which must be approved through Congressional legislative procedures. In fact, Trump's commitment at the 2024 Bitcoin conference has always been limited to 'prohibiting the sale of seized assets' and has never involved 'using fiscal funds to actively purchase Bitcoin.' The policy tool that could truly bring incremental Bitcoin reserves is the (Federal Strategic Bitcoin Reserve Bill) proposed by Senator Lummis, which involves substantial breakthroughs at the legislative level.
This table outlines the key points, significance, and development status of SBRs at various levels ⬇️
Despite the high uncertainty faced by Lummis's federal bill and the obstacles in advancing state-level bills, why is the 'Bitcoin Strategic Reserve' still worth looking forward to?
1. The current executive order reserves policy space for reserve expansion (which essentially leaves an opening for future increases in $BTC), authorizing the Treasury and Commerce Departments to explore budget-neutral paths for increasing Bitcoin holdings. Although the specific mechanisms have not yet been clarified, potential tools may include: utilizing the Exchange Stabilization Fund (ESF), incorporating judicially confiscated BTC and other crypto assets (through swaps) into reserves, releasing book value through gold revaluation, and exploring innovative methods such as debt swaps. These paths provide possibilities for the potential expansion of Bitcoin reserves.
2. The act of establishing Bitcoin reserves through the executive order itself releases institutional signals, reconstructing the game rules of global capital markets. Sovereign countries may follow suit to hedge against dollar credit risks, wealth management institutions are forced to adjust asset allocation models, pensions and endowment funds are including BTC in inflation-resistant portfolios, and financial institutions are accelerating the development of compliant products. This top-down policy orientation not only eliminates the tail risk of Bitcoin being 'prohibited' but may also trigger endless chain reactions, fundamentally changing the game rules and providing support for Bitcoin's long-term value.
