Trump’s strategic reserve, ‘crypto’ summit can’t halt BTC plunge

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Crypto bros hoping that Donald Trump would pump their bags by buying BTC tokens were instead left holding the bag by the U.S. president’s ‘strategic reserve’ plan.

• Reserve, stockpile, boondoggle
• Budget neutral or budget-busting?
• Crypto summit disappoints
• OCC rips up its crypto playbook
• Tether’s Ardoino dares to touch U.S. soil
• World Liberty Financial inks Sui deal
• Trump’s cash-and-carry crypto crusade

On March 6, Trump’s A.I. & Crypto Czar David Sacks tweeted that President Trump had signed an executive order “to establish a Strategic Bitcoin Reserve.” Sacks revealed that this reserve “will be capitalized with Bitcoin owned by the federal government that was forfeited as part of criminal or civil asset forfeiture proceedings. This means it will not cost taxpayers a dime.”

Sacks noted that the government currently owns “around 200,000” BTC tokens, but “a full accounting” of the government’s total digital asset holdings would now be conducted. Regardless, none of the BTC earmarked for the reserve would be sold, as Sacks claimed the government’s previous sales (of around 195,000 BTC) had resulted in “$17 billion in lost value.”

The initial reaction to Sacks’ announcement sent the BTC token’s fiat price above $90,000. However, the price soon plummeted below $86,000 as reality set in that there wouldn’t be any additional BTC purchases. The token briefly bounced back over $90,000 on March 7, but this too proved short-lived and the token was struggling to stay above $80,000 by the afternoon of March 9.

The executive order also establishes a companion “United States Digital Asset Stockpile” consisting of all the tokens other than BTC currently owned by the government.

While this stockpile likely includes the tokens promoted in Trump’s March 2 Truth Social post that referenced “XRP, SOL, and ADA,” Sacks later told Bloomberg that Trump’s post “just mentioned the top five cryptocurrencies by market cap” and warned about people “reading into this a little bit too much.”

The executive order directs the secretaries of the Treasury Scott Bessent and Commerce Howard Lutnick departments to “develop strategies for acquiring additional Government BTC provided that such strategies are budget neutral and do not impose incremental costs on United States taxpayers.”

There was no equivalent direction regarding the ‘digital asset stockpile,’ to which only tokens subject to criminal or civil asset forfeiture will be added absent “further executive or legislative action.”

BTC bagholders had invested much of their hopes in Trump announcing plans to use taxpayer funds to buy a million or more tokens, so the ensuing price slump was understandable. BTC maximalists are now seizing on the idea of what ‘budget neutral’ actions might result in the government acquiring additional BTC tokens.

Budget neutral or budget-busting?

On March 7, Sacks said ‘budget neutral’ meant “it won’t cost the taxpayer anything. It won’t increase the deficit, it won’t increase the debt.” Asked whether budget savings from Elon Musk’s controversial Department of Government Efficiency 
(DOGE) might represent taxpayer savings that could be applied to buying BTC, Sacks said he didn’t know the answer to that question.

Sacks added that Treasury Secretary Bessent and his team “will be able to exercise portfolio management” over the digital assets under the government’s control. As far as the non-BTC tokens are concerned, “that could include staking, it could include rebalancing, it could include sales. These are all options that they can pursue.”

In a separate interview, Sacks suggested one way that the government might acquire more BTC is by selling its ETH (the 
Ethereum network’s native token). The government is believed to hold nearly 46,000 ETH worth a total of $91 million, although that’s a relative drop in the bucket that would be unlikely to move BTC’s price needle very far.

On March 7, Bessent told CNBC that the first element of the reserve strategy was to “stop the selling” of any BTC under the government’s control. After that, “we’ll see what the way forward is for more acquisitions for the reserves.” Asked about how taxpayers would view any plans to buy additional BTC, Bessent simply repeated that it was a matter for future discussion.

Rep. French Hill (R-AR), the chairman of the House of Representatives Financial Services Committee, tweeted his approval of Trump’s executive order while encouraging Trump’s team “to collaborate with Congress, particularly in regard to the structure and funding” of the BTC reserve.

Sacks’ March 6 tweet likened the BTC reserve to a “digital Fort Knox for the cryptocurrency often called ‘digital gold.’” BTC maxis are hopeful that this means the plan envisioned by Sen. Cynthia Lummis (R-WY)—who wants the government to revalue the gold bricks in Fort Knox to their current worth and use this accounting sleight of hand to fund the purchase of up to one million BTC—might come to pass.

Sacks told Decrypt, “there’s been no conversation about” selling gold to buy BTC. In fact, Sacks claimed the administration hasn’t had any conversations about what any budget-neutral BTC-buying options might entail.

On March 7, Michael Saylor, founder of Strategy/MicroStrategy (NASDAQ: MSTR), tweeted a quote from Trump at the inaugural White House Digital Assets Summit held that day, specifically referencing the Treasury/Commerce remit to “explore new pathways to accumulate additional Bitcoin holdings for the reserve.”

Saylor, whose company has amassed its own BTC reserve totaling nearly 500,000 tokens—representing over 2% of the total supply—also tweeted that he’d “shared” his ‘Digital Assets Strategy’ with the Summit’s other attendees. This document calls on the government to acquire up to 25% of all BTC that will ever exist “through consistent, programmatic daily purchases between 2025 and 2035, when 99% of all Bitcoin will have been issued.”

For the record, at today’s BTC price, acquiring 25% of all the 21 million BTC that will ever exist would cost $435.75 billion, which would significantly increase America’s already staggering debt load.

As countless others have pointed out, this buy/hold strategy has a major flaw in that BTC’s price would crater the moment the government signaled any intention to sell a significant quantity of its reserve. This reality betrays the real desire of BTC maximalists, which is simply their short-term selfish desire to sell these utility-free digital Beanie Babies and leave taxpayers to try to find greater fools down the road.

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Summit supplicants

Getting back to Friday’s Summit, the crypto sector bigwigs on hand included Saylor; Coinbase (NASDAQ: COIN) CEO Brian Armstrong; Ripple Labs CEO Brad Garlinghouse; Robinhood (NASDAQ: HOOD) CEO Vlad Tenev; Gemini co-founders Cameron and Tyler Winklevoss; Crypto.com CEO Kris Marszalek; a16z general partner Chris Dixon; Anchorage Digital CEO Nathan McCauley, plus representatives from BitGo, Kraken, MARA (NASDAQ: MARA), Multicoin Capital, Paradigm and more.

Besides Trump, the political side was represented by secretaries Bessent and Lutnick as well as State Department secretary Marco Rubio; crypto czar Sacks; the Securities and Exchange Commission’s (SEC) Hester Peirce; acting chair of the Commodity Futures Trading Commission (CFTC) Caroline Pham; Small Business Administration chief Kelly Loeffler; the House of Representatives’ majority whip Rep. Tom Emmer (R-MN); chairman of the House’s digital assets subcommittee/
author of the stablecoin-focused STABLE Act Rep. Bryan Steil (R-WI); and exec director of the President’s Working Group on Digital Assets Bo Hines.

Trump got the ball rolling with opening remarks that took a while to get around to the subject at hand. After castigating his predecessor, Joe Biden, for “foolishly” selling some of the BTC seized by the feds over the years, Trump repeated the BTC maxi motto of “never sell your Bitcoin.”

On that note, Trump expressed hope that Congress will send an approved stablecoin bill to his desk “before August recess, if they can.” This is a far less urgent timeline than crypto operators had thought was in the cards, a potential indication of (a) how tough it is to herd the cats on Capitol Hill, and (b) the low priority that Trump and his minions actually put on moving this sector forward.

Once Trump was done speaking, the performative kowtowing was officially underway. Crypto bros, government officials and elected politicians all expressed their admiration for everything Trump has done and will do. If they’d all been holding little books and pens, it would have looked like one of those Kim Jong-un photo ops. Trump even patted himself on the back by referring to his supplicants as “high IQ individuals” who are clearly smart enough to recognize his genius.

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OCC rips up its crypto playbook

While Trump was holding court at the White House, federal agencies continued dismantling the regulatory guardrails that kept the crypto car from crashing into the broader financial sector. On March 7, the Treasury Department’s Office of the Comptroller of the Currency (OCC) announced that “a range of cryptocurrency activities are permissible in the federal banking system.”

The OCC released Interpretive Letter 1183, which “reaffirms that the crypto-asset custody, distributed ledger, and stablecoin activities … discussed in prior letters are permissible.” These include holding deposits that act as stablecoin reserve assets.

The OCC also rescinded Interpretive Letter 1179, which required OCC-supervised institutions to receive supervisory non-objection notices and demonstrate that they have adequate controls before engaging in cryptocurrency activities.

Those activities include acting as nodes on “an independent node verification network” (aka a blockchain) “to verify customer payments,” as well as facilitating stablecoin-related “payment transactions on a distributed ledger.”

Finally, the OCC “withdrew its participation” in the joint statement identifying key risks for banks in dealing with the digital asset sector. That statement, issued two years ago, was co-signed by the U.S. Federal Reserve and the Federal Deposit Insurance Corporation (FDIC). The FDIC’s new leadership recently issued its rejection of previous stances vis-à-vis crypto-related activities.

Acting Comptroller Rodney Hood said the new rules “will reduce the burden on banks to engage in crypto-related activities and ensure that these bank activities are treated consistently by the OCC, regardless of the underlying technology. I will continue to work diligently to ensure regulations are effective and not excessive, while maintaining a strong federal banking system.”

Mike Novogratz, founder of crypto custodians Galaxy Digital, was among those celebrating the OCC news, tweeting that they will “greatly increase institutional adoption” of digital assets. Novogratz suggested this change “might be more important” than the establishment of the BTC reserve.

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Look! A Tether exec on U.S. soil!

Politico later reported that Coinbase hosted a post-summit reception that was attended by many of the summit luminaries, including Bessent, Sacks, Steil, Saylor, Pham and a couple of other GOP congressmen. Brian Quintenz, Trump’s nominee to head up the CFTC, was also there.

Not in attendance was Paolo Ardoino, CEO of Tether, the issuer of the world’s largest stablecoin by market cap (USDT). On March 6, Ardoino surprised his X followers by tweeting images of himself in Washington, D.C., including on the steps of the Capitol and apparently inside the White House. However, there have been no reports that he was either invited to or was allowed to attend Friday’s summit.

Fox Business reported Eleanor Terrett reported that Ardoino did attend the CFTC forum on digital assets on March 6, which also featured Ripple’s Garlinghouse, Crypto.com’s Marszalek, Moonpay CEO Ivan Soto-Wright and representatives from Coinbase and Circle (the latter the issuer of USDT’s closest stablecoin rival USDC).

Circle and Tether are basically in open warfare right now over Tether’s ability to participate in a regulated U.S. stablecoin market. The U.S.-based Circle was believed to have an inside track with legislators, given its role in the Fairshake political action committee (to which USDC partner Coinbase was a major contributor) that helped boost pro-crypto politicians’ fortunes in last year’s elections.

But Tether has an ally in Commerce Secretary Lutnick, whose Wall Street firm Cantor Fitzgerald (NASDAQ: ZCFITX) not only custodies Tether’s $100 billion+ in U.S. Treasury bills but also negotiated a ‘convertible bond’ estimated to be worth as much as 5% of Tether. The Wall Street Journal has reported that Lutnick promised to kill any legislation that might exclude Tether from the U.S. market, a claim that Lutnick has only partially refuted by saying he wouldn’t “do anything improper with respect to Tether.”

Ardoino will appear at the Bitcoin Policy Institute’s Bitcoin for America event on Tuesday, March 11, alongside Stripe’s Jack Mallers. Ardoino will give his inaugural in-person U.S. keynote address at the Cantor-hosted Global Technology Conference the following day.

Ardoino’s presence on U.S. soil came as a surprise to many—including this reporter—given multiple mainstream media reports of indictments waiting to be unsealed should any senior Tether exec present himself at U.S. customs. USDT has a long history of fueling all manner of criminality, including ‘pig butchering’ scams, sanctions evasion and terror groups.

It seems as if Lutnick could pull the necessary strings within the administration to keep the Department of Justice (DoJ) from clapping Ardoino in irons. Whether this foreshadows upcoming changes to proposed stablecoin legislation to ensure a more USDT-friendly approach remains to be seen.

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World Liberty Boondoggle

Among those in attendance at Friday’s White House summit was Zach Witkoff, co-founder of Trump’s decentralized finance 
(DeFi) project, World Liberty Financial (WLF). WLF made headlines last week when it ‘bought the dip,’ adding $25 million worth of ETH, ‘wrapped’ BTC (WBTC) and MOVE to its asset portfolio. WLF now holds around $78.5 million worth of various tokens, led by ETH, USDT, WBTC and staked ETH (STETH).

WLF also revealed that it had struck a “strategic reserve deal and collaboration” arrangement with Mysten Labs’ delegated proof-of-stake (DPoS) blockchain Sui. On March 6, the Sui Foundation said it and WLF would “explore product development opportunities,” but the deal’s only tangible result to date is WLF including Sui assets in Macro Strategy, the ‘strategic token reserve’ plan that WLF announced last month.

Sui’s native token enjoyed a 12% gain to nearly $3 following the news but has since surrendered all those gains and then some, currently sitting at $2.35, about where it was two days before the WLF deal was announced.

Some members of ‘crypto Twitter’ expressed disappointment with WLF’s latest announcement of a token purchase, particularly given the likelihood that insiders made a killing on the brief SUI pump. More and more voices are starting to ask when WLF might actually engage in any actual DeFi activities or whether those ‘reciprocal sales’ rumors are WLF’s sole reason for being.

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Quid pro yo!

According to the Wall Street Journal, Trump bragged to donors on March 1 about how much money he made from his various crypto endeavors. This includes WLF, his $TRUMP memecoin, his various NFT collections and other highly dubious activities for a sitting president. Trump reportedly told guests at his Mar-a-Lago club in Florida that his memecoin might now be worth more than the resort.

The Journal reported that, between Trump’s November election and January inauguration, he met with eight different crypto execs, who collectively gave $50 million in donations to his inaugural fund and related groups. “He asked the donors how they wanted the industry regulated and who should do it.”

(Wired reported last week that Trump’s super PAC ‘Maga Inc’ charges as much as $5 million to meet one-on-one with business leaders at Mar-a-Lago, while $1 million gets you a seat at a multi-person dinner.)

The crypto companies looking to bend Trump’s ear reportedly got help from Trump’s former campaign manager, Paul Manafort, who in 2019 was sentenced to 47 months in prison for financial fraud and an additional 43 months for money laundering, tax fraud and illegal foreign lobbying. Trump pardoned Manafort in December 2020. Manafort was a VIP guest at the Crypto Ball celebrating Trump’s second inauguration.

Trump initially planned to appoint a so-called ‘crypto council’ on which select industry members would have a seat. But crypto execs’ fight to secure a seat was so rabid that Trump reportedly scrapped the idea rather than reward some and exclude others, which might cost him the goodwill of an industry that has already amassed over $100 million to spend on the 2026 midterm elections.

Given Trump’s notoriously transactional approach to politics, as well as the seemingly endless need to cover everything he owns in gold leaf, one can only speculate on how large a ‘convertible bond’ he might have coaxed out of Tether to call off the Department of Justice.

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