Crypto for Advisors: What Is a Bitcoin Strategic Reserve?
In today's crypto for advisors, Alex Tapscott explains what the Bitcoin Strategic Reserve is and why it matters to investors.
Then, Bryan Courchesne from DAIM answers questions investors have about setting up a personal strategic reserve in Ask an Expert.
– Sarah Morton
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On March 7, President Trump signed an executive order creating both a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile, the latter comprised of tokens like ETH, SOL, XRP and ADA.
The Strategic Bitcoin Reserve (SBR) and the Digital Asset Stockpile will be capitalized initially with crypto assets obtained by the Department of Treasury through criminal and civil asset forfeiture. Analysts estimate that they will capitalize the SBR with $6.9 billion in bitcoin currently in the government wallet.
The news disappointed some bitcoin bulls, who were annoyed by the inclusion of other crypto assets and by the relatively modest initial goals of the Reserve. Altcoin fans were initially euphoric following Trump's tweet announcing the plan but soon became disillusioned as it became evident that the plan for the U.S. Digital Asset Stockpile was severely limited in scope — the government sits on only $400 million of non-BTC coins and has no intention of adding more.
So what should we make of all this?
The idea of a strategic reserve for critical assets or commodities is not new. The U.S. government maintains strategic stockpiles of gold and petroleum, and governments and central banks hold large balances of foreign currencies, for example.
Using that framework, one could argue that a strategic bitcoin reserve makes sense if you believe bitcoin will continue to mature into an important commodity and monetary asset.
By vowing never to sell any of its BTC, the government effectively removed many billions of dollars in potential selling pressure from the market forever. What's more, they are sending a signal to other governments that this is a reasonable way to treat seized bitcoin, labeling it 'strategically important.'
And this could just be the start: Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, both well-known bitcoin bulls, are now authorized to develop budget-neutral strategies for acquiring additional BTC, provided that those strategies impose no incremental costs on American taxpayers. Among other things, they could:
Sell unused government assets, such as defunct and empty buildings.
Revalue the government's gold and sell a portion off to buy bitcoin.
Use surplus in the Treasury's Exchange Stabilization Fund (ESF), a funding facility controlled by the Treasury.
Sell altcoins from the U.S. Digital Asset Stockpile (worth approximately $408 million).
Use a portion of tariff revenue, such as that affecting the import of bitcoin mining equipment.
If implemented, these programs could significantly increase the size of the SBR.
What about the Digital Asset Stockpile?
One could argue that platforms like Ethereum and Solana are becoming more strategically important to the U.S. A Digital Asset Stockpile could help future-proof the government and signal to the industry that they're a model user of new technology, akin to the federal government in the 1990s launching its own website.
Perhaps. But so far, it looks like the government has put very little thought into the Digital Asset Stockpile and has actually said it may even sell these digital assets to bolster the SBR.
For investors, the Strategic Bitcoin Reserve is neutral short-term and potentially positive long-term if it can scale through budget-neutral mechanisms. As for the Digital Asset Stockpile, we simply do not know enough to make a judgment one way or the other. The government may grow the asset base through revenue-neutral mechanisms, like with the SBR. Crypto and AI Czar David Sacks has said they are looking at many of the largest tokens by market capitalization, suggesting purchases may come at some point. Or maybe they dump their altcoins to boost their BTC balance.
In my view, the government should tone down these flashy stunts and instead focus on collaborating with industry, civil society, regulators and lawmakers to craft the laws and regulations that can put the industry on a firm footing, encourage investment from institutions and enterprises, and catalyze more capital formation and entrepreneurship..
-Alex Tapscott, managing director, Ninepoint Digital Asset Group
Q. Like the government, can I set up my own bitcoin strategic reserve?
We believe the establishment of a Bitcoin Strategic Reserve (SBR) is the perfect time for investors to consider creating their own personal bitcoin reserve. If the U.S. government sees the value in holding bitcoin as a strategic asset, there's no reason individual investors shouldn't consider doing the same. Bitcoin is one of the scarcest assets in existence, and any significant uptick in demand could drive its price substantially higher. While its volatility is well-known, the asset's risk/reward profile makes it a prudent addition to a diversified portfolio in reasonable amounts.
Q. What factors should I consider?
The tendency of individuals to buy and hold bitcoin benefits all investors. Bitcoin's digital scarcity ensures that there will only ever be 21 million coins. Any time a bitcoin is lost due to an inaccessible wallet or sent to an invalid address, the supply is permanently reduced — further increasing its scarcity.
Think of owning bitcoin as like being an early investor in prime digital real estate. You may have missed the opportunity to buy land in Manhattan during its development, but you don't have to miss out on bitcoin. And unlike traditional property, you don't need to purchase an entire bitcoin — you can own a fraction.
Investing in bitcoin isn't just about securing a digital stake; it's also about participating in a technological revolution that's been gaining momentum for over a decade. While decentralized finance (DeFi) is often associated with assets like Ethereum and Solana, DeFi applications — including lending and staking — are increasingly being built on or alongside the Bitcoin blockchain. By holding bitcoin, you're not only owning digital real estate but also gaining early exposure to a groundbreaking financial ecosystem.
However, the decision to buy bitcoin isn't all-or-nothing. Your investment should reflect your overall portfolio, time horizon, liquidity needs and risk tolerance.
-Bryan Courchesne, CEO, DAIM
Oklahoma Bill 1203, allowing the state to invest in digital assets, was passed by its House of Representatives.
GameStop's board of directors unanimously voted in favor of updating its investment policy to include bitcoin as a treasury reserve asset.
The 'Bitcoin Rights' bill was signed into law in Kentucky, providing protections for mining and self-custody of digital assets.
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