While on the campaign trail, then-candidate Donald Trump energized the Bitcoin community with a bold promise: to halt the U.S. government’s practice of selling seized Bitcoin and instead build a strategic reserve. But with the presidential transition underway, experts are raising doubts about whether this vision can become reality without buy-in from Congress.
A Bitcoin Stockpile in Legal Limbo
At last tally, the federal government held a staggering 208,109 Bitcoin—over $19 billion worth—obtained through various criminal seizures. Traditionally, Uncle Sam has routinely auctioned off these digital assets. But Trump’s Nashville speech in July signaled a sea change: under his watch, 100% of forfeited Bitcoin would be retained.
Simple as it sounds, this policy pivot may not be so straightforward. Perianne Boring, CEO of The Digital Chamber, suggested that shifting custody of the Bitcoin trove could face bureaucratic tangles:
Can you just move money between the federal agencies like that? I don’t know. If you’re moving [Bitcoin] out of the Department of Justice to the Treasury… that likely requires an act of Congress.
– Perianne Boring, The Digital Chamber
Patchwork of Protocols
Moish Peltz, a partner at Falcon, Rappaport and Berkman, noted that the handling of seized Bitcoin hinges on a web of variables—from the seizing agency to the specific case details. Navigating this patchwork to establish a bona fide reserve is uncharted territory.
Still, Peltz sees a potential path forward. The government’s track record with sizeable Bitcoin seizures “demonstrates competency,” he argued, making it “easy to imagine” a methodical transition toward a true strategic reserve over time, bolstered by “regulatory clarity” and focused legislation.
Buying the Dip?
Holding onto ill-gotten Bitcoin is one thing. But some envision a more ambitious approach: actively buying more. Senator Cynthia Lummis turned heads with her eyebrow-raising proposal to offload gold reserves and snatch up 1 million BTC—a $90+ billion shopping spree at today’s prices. Passing such a bill, though, is a tall order even with GOP control of both chambers.
Castle Island Ventures partner Nic Carter, fresh off meetings with Washington power brokers, isn’t holding his breath. Stablecoin regulation and “Operation Choke Point 2.0” investigations are consuming lawmakers’ bandwidth, he reported. The Bitcoin reserve bombshell “didn’t come up” at all.
Funding an End-Run?
For Bitcoin bulls eager to bypass the Capitol Hill gauntlet, some see a crafty alternative: leveraging the Treasury’s Exchange Stabilization Fund (ESF) to scoop up Bitcoin-backed debt instruments. Upon maturity, the Bitcoin would transfer to federal coffers—growing the reserve without direct market purchases. Zack Shapiro of the Bitcoin Policy Institute floated this novel approach as a treasure map around the congressional minefield.
But will this deft dance bear fruit? Bettors on Polymarket currently give it a 30% chance that Uncle Sam will be minting Satoshis along with greenbacks come springtime. As the Trump era dawns anew, Bitcoiners wait with bated breath to see if his bullish talk translates into more than just sweet tweets.
