At the signing ceremony for the Strategic Bitcoin Reserve (SBR), US President Donald Trump seemed as confused about its impact as the rest of the market. On the announcement, which came via a tweet from Crypto Czar David Sacks, crypto prices globally tanked.
Within an hour, the market capitalization of crypto assets shed $200 billion.
Despite announcing an executive order authorizing the US Treasury and Commerce Secretaries to buy bitcoin (BTC), Trump appeared to struggle to fully comprehend the text in front of him. After Sacks verbally summarized the order, Trump asked him to clarify, “And this is something you believe in fully?” Sacks assured him, “100%.”
“Alright,” Trump continued. “And we made the promise, right?”
Sacks responded consolingly, “Absolutely.”
Strategic Bitcoin Reserve or stockpile or whatever
Some of the confusion was semantic. Despite promising a stockpile of BTC and a strategic reserve of BTC, ether (ETH), XRP, solana (SOL), and cardano (ADA), Trump actually signed an order creating a BTC-only reserve and an altcoin-only stockpile.
Additional confusion resulted from the practical meaning of these terms. Although strategic reserves and stockpiles are controlled terms that have historically excluded discretionary investments in speculative assets, Trump’s executive order is repurposing these terms for political purposes.
According to Sacks, the US government will administer two new crypto funds: a BTC reserve and an altcoin stockpile. Forfeitures from criminal or civil legal proceedings will seed both funds.
The BTC-only reserve might also acquire additional BTC via Treasury and Commerce department authorizations to develop “budget-neutral” buying strategies that ensure “no incremental costs on American taxpayers.”
Despite a first-hour sell-off amid the confusion of the news, crypto market prices recovered relatively quickly. Within 90 minutes of the news, the market cap of all crypto assets was within 1.8% of their pre-announcement prices.