President Donald Trump Signs Executive Order on Bitcoin

President Donald Trump signed an executive order earlier this week, officially creating a Strategic Bitcoin Reserve (SBR) using only the seized Bitcoin that the US government already owns.

This means no new purchases or market buys—just stockpiling what has already been taken from criminals and fraudsters. Crypto traders were expecting something different; they wanted the government to start buying more Bitcoin, believing it would increase prices. Instead, many expressed disappointment on X (formerly Twitter).

Scott Melker, host of The Wolf of All Streets podcast, addressed the outrage in a post, stating: “If you think that the Bitcoin SBR is bad news because it will only contain seized Bitcoin, then you are bad at reading and worse at comprehending what you are reading. Sell me your Bitcoin.”

XRP lawyer John Deaton supported Melker, noting, “As usual, Scott is 100% spot on. I’ve seen a lot of negative takes regarding the EO. Many crypto investors were hoping for a Strategic MultiCoin Reserve, not just a Strategic Bitcoin Reserve.”

Trump’s Directives to Treasury and Commerce

During his White House crypto summit, Trump declared, “Last year, I promised to make America the Bitcoin superpower of the world and the crypto capital of the planet, and we’re taking historic action to deliver on that promise.”

The executive order directed Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick to devise methods for acquiring more Bitcoin without using taxpayer dollars. This includes exploring loopholes, incentives, and partnerships.

Deaton pointed out a significant tool at their disposal: the Exchange Stabilization Fund (ESF), which gives the Treasury Secretary broad authority to buy and hold financial assets to stabilize the dollar. Could Bitcoin be included? It’s plausible, but likely to face court challenges.

Another avenue is the International Emergency Economic Powers Act (IEEPA). If Trump declared the $36 trillion national debt an economic emergency, he could use the IEEPA to justify Bitcoin purchases through executive action. However, that would necessitate printing money to buy Bitcoin, creating potential complications.

Additionally, the Defense Production Act could be utilized if Bitcoin mining were declared critical to national security, allowing the government to mine and acquire Bitcoin directly. Though Deaton labeled this idea “insane,” it remains legally viable.

One of the simplest ways for the government to increase its Bitcoin holdings is through criminal seizures. When authorities confiscate Bitcoin from fraudsters, they typically auction it. However, Trump’s executive order could mean retaining it instead, driving law enforcement to intensify efforts against crypto-related crime.

Another potential strategy is taxing Bitcoin miners in BTC, compelling major mining operations in the US to pay a portion of their mining rewards to the government, possibly in exchange for tax breaks or regulatory benefits.

The IRS and Commerce Department might begin accepting Bitcoin for federal payments, allowing the government to accumulate Bitcoin over time instead of converting it to dollars. A more assertive approach could see federal land and energy lease payments required in Bitcoin, embedding it as a national asset and encouraging mining and energy companies to succeed with Bitcoin.

Deaton also suggested partnerships with US tech and finance firms, creating incentives for companies like Coinbase and Ripple to assist in acquiring and managing Bitcoin reserves.

Potential Strategies for Acquiring More Bitcoins

Trump’s executive order makes no mention of gold reserves, but swapping a portion of the US government’s 8,100 tons of gold for Bitcoin could rapidly increase BTC holdings.

Tokenized US Treasury bonds could be issued to acquire Bitcoin without market purchases, allowing the government to use BTC in financing operations through debt instruments.

Another suggestion by Deaton includes imposing a Bitcoin Tariff instead of a USD tariff on certain imports, such as high-tech goods, rare earth metals, or semiconductors critical to national security, leveraging tariffs and Bitcoin policy together.

Deaton proposed Bitcoin-pegged export credits, incentivizing US companies with BTC credits when selling goods abroad and allowing the government to build reserves without direct market purchases. Similarly, energy deals with countries like Saudi Arabia and Canada could be structured to allow BTC payments for US exports, increasing international Bitcoin demand.

Issuing Bitcoin-backed bonds linked to energy reserves, as done by El Salvador, could tie investments in both Bitcoin and US energy production.

Trump’s executive order does not prevent private individuals or companies from donating Bitcoin to the US reserve. Tax incentives for BTC donations could bolster contributions without direct government spending. Federal contractors might also pay a fraction of their contracts in Bitcoin, allowing for gradual accumulation of reserves.

Regular taxpayers could be encouraged to pay taxes in Bitcoin, Ethereum, or XRP, with a small portion kept in the reserve through capital gains tax breaks for cryptocurrency payments.

“Hence, the EO we received is as aggressive as a President can do, absent invoking emergency powers. I’m surprised BTC isn’t $120K already. As for the MultiCoin debate and people disappointed, BTC has ALWAYS led the market. You can dislike it, but it’s reality,” Deaton stated in his X post.