Strategic Bitcoin Reserve Signing Ceremony

At the signing ceremony for the Strategic Bitcoin Reserve (SBR), US President Donald Trump seemed just as confused about its implications as the rest of the market. The announcement, which came via a tweet from Crypto Czar David Sacks, caused global crypto prices to plummet.

Within an hour, the market capitalization of crypto assets lost $200 billion. In just 90 minutes after the news, the combined crypto market cap approached 1.8% of its pre-announcement price.

Despite the announcement of an executive order allowing the US Treasury and Commerce Secretaries to purchase bitcoin (BTC), Trump appeared to struggle with the details. After Sacks summarized the order, Trump questioned, “And this is something you believe in fully?” Sacks reassured him, “100%.”

Trump then responded, “Alright. And we made the promise, right?” Sacks affirmed, “Absolutely.”

Confusion over Terminology

Much of the confusion stemmed from semantics. While promising a stockpile of BTC and a strategic reserve of BTC, ether (ETH), XRP, solana (SOL), and cardano (ADA), Trump officially established a BTC-only reserve and a separate altcoin stockpile.

The practical meaning of these terms also contributed to the confusion. Although strategic reserves and stockpiles traditionally exclude discretionary investments in speculative assets, Trump’s executive order is redefining these concepts for political ends.

According to Sacks, the US government will manage two new crypto funds: a BTC reserve and an altcoin stockpile, funded by forfeitures from legal proceedings. The BTC-only reserve may also acquire additional BTC through Treasury and Commerce department authorizations, ensuring “no incremental costs on American taxpayers.”

Despite an initial sell-off following the announcement, crypto market prices rebounded swiftly. Within 90 minutes of the news, the market cap of all crypto assets was within 1.8% of their values prior to the announcement.