US Bitcoin Reserve to be Fort Knox of the digital age
The establishment of a “Strategic Bitcoin Reserve” in the United States serves as proof of President Donald Trump’s backing of the cryptocurrency industry, despite some concerns about the move. Critics blame the US government for failing to return bitcoin to all victims affected by a hack. Trump recently signed an executive order setting up the reserve, which White House crypto chief David Sacks has likened to a “digital Fort Knox,” drawing parallels to storing gold bars at a US military base.
Across the world, countries hold gold reserves as a safeguard against financial instability, including high inflation. Gold prices exceeded $3,000 per ounce for the first time due to economic uncertainties surrounding Trump’s tariffs. Additionally, gold reserves can help stabilize a nation’s currency and are used as collateral for loans and transactions.
The US Bitcoin Reserve, funded by approximately 200,000 bitcoins valued at around $17 billion seized in the US from civil and criminal cases, is a significant development. More bitcoins can be added to the reserve if the action is “budget-neutral.” The initial price of bitcoin dipped following Trump’s signing of the executive order but has since stabilized. Analysts emphasize the legal requirement for the US government to return bitcoin to all hack victims.
Crypto data provider Kaiko’s analyst Dessislava Aubert highlighted that a substantial portion of the roughly 198,000 bitcoins held by the US would have to be returned to victims of the 2016 Bitfinex hack. Observers anticipate whether additional digital currencies will be included in the reserve, as mentioned in the executive order. Alongside bitcoin, Trump suggested the possibility of adding Ether, XRP, Solana, and Cardano.
Critics argue that cryptocurrencies, unlike gold, are volatile assets with no intrinsic value. Nonetheless, David Sacks believes that by stockpiling bitcoin, the government can protect itself from the currency’s volatility. Investment director Stephane Ifrah at Coinhouse pointed out that bitcoins, like gold, can benefit from their scarcity as a limited total of 21 million tokens exist.
The US Bitcoin Reserve offers transparency, contrasting with the gold reserves at Fort Knox, as the number of tokens will be clearly identifiable at all times. The reserve’s establishment indicates a strategic move by the White House to safeguard and manage the future of cryptocurrencies within the US.
