When the idea of a strategic bitcoin reserve was first announced, I had my share of reservations. If implemented incorrectly, acquiring significant amounts of bitcoin could unintentionally signal a lack of confidence in the dollar. Even more concerning, positioning bitcoin as a return to the gold standard—just this time in digital form—could undermine decades of robust monetary policy, destabilizing key U.S. institutions. History teaches us to be careful with monetary innovations—they rarely come without unintended consequences. The gold standard, for example, proved disastrous during the Great Depression by severely limiting policymakers’ ability to respond to the economic crisis. More recently, quantitative easing, initially praised as a clever tool for recovery, ended up fueling asset bubbles and dramatically widening wealth inequality.
Preserving the U.S. dollar’s status as the global reserve currency is, of course, far more important than simply being first in adopting a new technology. Fortunately, these two goals aren’t necessarily in conflict; in fact, with the right strategy, they can complement each other.
President Donald Trump’s March 6 executive order demonstrates exactly this type of careful balancing act: steering the United States toward technological leadership while minimizing potential side effects on the U.S. dollar or prematurely embracing cryptocurrencies that have not reached meaningful scale.
First, the order draws a clear distinction between digital assets such as bitcoin that have a proven history of decentralization and significant retail and institutional adoption and all other digital assets, which are placed into a broader, more general stockpile.
Second, the reserve won’t impose any additional burden on taxpayers with new government spending to acquire digital assets, as it will be composed entirely of forfeited assets—although exactly how this will function remains unclear. For instance, nearly half of the bitcoin currently believed to be held by the U.S. Marshals Service comes from assets recovered after the 2016 theft of bitcoin from Bitfinex. Notably, in January, federal prosecutors requested the court return these assets directly to the exchange, raising further questions about implementation.
Third, bitcoin—given its strategic designation under the executive order—is intended for long-term holding and can be acquired directly in a budget-neutral manner, through methods yet to be defined by the U.S. Treasury and Department of Commerce. In contrast, the digital assets in the stockpile won’t receive this strategic treatment and may be liquidated.
President Trump’s executive order steers the United States toward technological leadership while minimizing potential side effects on the U.S. dollar or prematurely embracing cryptocurrencies that have not reached meaningful scale.
Cryptocurrency will only become widely accepted if people use it for transactions. Buying a bunch of it and storing it in a digital vault does nothing to promote that kind of use.
Of course, any strategic use of bitcoin will take time to materialize. Until the executive order is solidified through legislation—such as Sen. Cynthia Lummis’ reintroduced Boosting Innovation, Technology, and Competitiveness Through Optimized Investment Nationwide (BITCOIN) Act—it remains uncertain exactly how things will evolve. A future administration could decide to reverse course entirely, liquidating holdings or even taking a more adversarial stance to cryptocurrency. While technology might allow the current administration to lock in bitcoin holdings for the long term, it can’t prevent future presidents from reversing that commitment—potentially at significant economic cost.
Ultimately, the survival of a strategic bitcoin reserve will depend on bipartisan agreement that the U.S. government should actively engage with this emerging technology, particularly if bitcoin continues to grow in geopolitical importance. In the immediate term, however, there are significant logistical hurdles: quickly auditing existing forfeited assets, consolidating them under unified custody, and securing them against both physical and cyber threats. Speed is essential here—especially if America intends to expand its holdings and build a meaningful bitcoin position without other countries or major financial institutions buying first and pushing up prices.
Opposing Debate
Of course, one might ask why the government needs a bitcoin strategy at all. The reality is that it’s not only important for the United States to maintain its leadership—it’s likely long overdue. First, historically, the lack of a coherent approach has cost the United States dearly: It progressively has auctioned off its crypto holdings, leaving substantial value on the table. Trump’s “crypto czar,” David Sacks, pointed out that previous bitcoin auctions netted the government around $400 million, but said those same bitcoin holdings would be worth more than $17 billion today. Naturally, hindsight is twenty-twenty—markets could have moved differently than they did—but still, leaving billions on the table isn’t ideal. It seems reasonable, therefore, for the U.S. to adopt a thoughtful, long-term strategy for managing digital assets, especially as the industry reaches an inflection point—with increasing adoption in payments—and the stakes rise with China positioning itself as a leader through Hong Kong.
Second, establishing a strategic reserve sends a powerful signal that the United States is ready to lead the next wave of financial innovation. We’ve seen this play out before: American leadership during the rise of the internet paved the way for today’s tech giants to emerge predominantly as U.S. companies. Replicating this success in the era of bitcoin and decentralized finance could similarly drive significant economic growth, supporting job creation and helping address national debt. If the goal is to position the United States as the global hub for this new financial ecosystem, strategically holding the assets powering it makes intuitive sense—and sends a strong message to the world.
Third, bitcoin is likely to become increasingly significant on the geopolitical stage. For decades, adversaries have sought to challenge the dollar’s dominance as the global reserve currency—a position that confers substantial advantages to the U.S. government, businesses, and citizens. In a world trending toward multipolarity, bitcoin could serve as a crucial neutral asset, helping counter the rise of alternatives to the dollar. While other nations stockpile gold, the United States could strategically leapfrog them by embracing bitcoin, which has key advantages over gold: It’s more portable, divisible, and easier to verify and transfer. Moreover, bitcoin’s decentralized nature—meaning no single person, company, or government controls it—aligns closely with American values such as freedom, openness, and individual rights. Similar to the principles behind the open internet, bitcoin allows anyone to participate without needing special permission, providing a strong contrast to authoritarian regimes where governments tightly control access to information and money flows.
Finally, embracing bitcoin—and perhaps other strategically important cryptocurrencies in the future—doesn’t have to undermine the dollar. Quite the opposite: By promoting dollar usage across permissionless blockchain networks, particularly through robust regulation of stablecoins—cryptocurrencies whose value is pegged to the dollar—the United States can expand global access to dollars, making transactions cheaper, easier, and more frictionless—including by leveraging the bitcoin network itself. In this complementary relationship, bitcoin can extend financial reach, aligned with U.S. values and principles, to places these stablecoins cannot, and vice versa, reinforcing the dollar’s role as the indispensable “killer app” of the global economy.
