The US government established the Strategic Bitcoin Reserve (SBR) made up of seized Bitcoins. However, markets were shaken by this announcement as they expected the government to actively buy Bitcoin. Prices plummeted by over $5,000, leading investors and industry experts to discuss the long-term impacts of this move. On March 6, 2025, the US government signed an executive order to create the Strategic Bitcoin Reserve (SBR). Despite high hopes in the market for a positive impact, the announcement did not meet expectations, causing the price of Bitcoin to drop by $5,000 to $88,300. By March 8, at 10:30 AM, the price had further declined to $86,000. Cryptocurrency investor and host of the Wolf of All Streets podcast, Scott Melker, analyzed the price movement and the long-term effects of the reserve. Donald Trump, at the Nashville Bitcoin Conference in the summer of 2024, announced that the US government would establish a Bitcoin reserve. Simultaneously, Senator Cynthia Lummis presented a bill proposing the country acquiring one million Bitcoins within five years. Expectations were high for Trump to implement this plan immediately once in office. However, the disappointment arose when he failed to address the issue during his inaugural speech and only focused on granting clemency to the founder of Silk Road, Ross Ulbricht. After months of speculation, the Trump administration announced that the government would not be buying Bitcoin actively but would create a stock comprising seized Bitcoins. This was significantly different from Senator Lummis’s projected strategy of active Bitcoin purchase. The government’s reserve would grow solely from confiscated and seized assets without taxpayers’ funds being used. Additionally, on the same date, another initiative called Digital Asset Stocks was introduced to include other major crypto assets like Ethereum (ETH), Cardano (ADA), Solana (SOL), and Ripple (XRP). However, critics suggested that David Sacks, appointed as the White House’s crypto czar, could indirectly benefit from these reserves. Sacks vehemently denied these allegations. Describing what occurred before the Strategic Bitcoin Reserve announcement, many investors anticipated the government actively purchasing Bitcoin from the market. However, it was announced that only seized Bitcoins would be held, leading to a sharp price drop. Scott Melker, in the Wolf Den bulletin, referred to this development as a success and hailed Bitcoin being recognized as a strategic asset by the US government as “the biggest step for the US in Bitcoin”. According to Melker, the US cannot afford to lag behind China in terms of Bitcoin reserves and this move will trigger global competition to increase Bitcoin demand. Evaluating the short-term decline in Bitcoin’s price, Melker stated that this movement was the result of “clearing leveraged operations triggered by major news in a market with low liquidity”. He believed that major investors would see this drop as a buying opportunity and that the price would rise in the long run. After the details of the Strategic Bitcoin Reserve were revealed, mixed responses were seen in the crypto community. Many investors were disappointed that the government would only hold seized assets rather than buy Bitcoin. Jeff Park from Bitwise Invest criticized the executive order, saying, “This was not a strategic move but a big pump-and-dump operation, and I’m happy it’s over.” However, overall, the decision was viewed positively by crypto supporters. Even though Senator Lummis expressed support for the initiative despite it not being implemented, she criticized the fact that Congress was not involved in the process. A Bitcoin investor known as the “Bitcoin Therapist” on social media platform X described the executive order as “the most optimistic news seen in the past four years” and believed that the US’s move would accelerate Bitcoin’s long-term global acceptance. US government’s acknowledgment of Bitcoin as a strategic asset and establishment of a reserve made up of seized Bitcoin’s resonated in the global financial world. Ryan Rasmussen, the Research Chief at Bitwise Asset Management, stated that this move would expedite Bitcoin’s adoption, enhance its legitimacy, and remove fears of government pressure. In a statement on March 7, Rasmussen expressed that the US’s Bitcoin reserve could lead to profound changes in the global financial system. He suggested that this move would cause a ripple effect, prompting other governments, financial institutions, and investment funds to also create similar Bitcoin reserves. Rasmussen claimed that establishing a Bitcoin reserve on a global scale would make it internationally recognized and initiate other countries to start accumulating BTC as well. He argued that the US recognizing Bitcoin officially as a strategic asset would prompt others to follow suit, thus integrating Bitcoin more deeply into the global financial system. Additionally, Rasmussen believes that a significant shift will also occur in the finance sector. Holding Bitcoin by the US government could serve as a reference for wealth managers, retirement funds, and financial institutions. So far, these institutions have been hesitant towards Bitcoin due to regulatory uncertainties, but it is noted that this move by the government could increase their interest in the crypto market. Concerns about US selling its Bitcoin holdings and causing price volatility have been raised in the market. However, Rasmussen defends that the government will continue to accumulate Bitcoin and this will boost confidence in the asset in the long run. He emphasized that the possibility of the US banning Bitcoin is now “definitely zero.” Bitwise Chief Investment Officer Matt Hougan shares similar opinions with Rasmussen. Hougan suggested that when the US recognizes Bitcoin as a strategic asset, other countries will likely follow suit and this could initiate a global Bitcoin race. In a statement on March 4, Hougan noted that countries like El Salvador, Bhutan, and Abu Dhabi have already bought Bitcoin, and many others are closely monitoring the situation. He raised the inevitability of a global trend for creating Bitcoin reserves, indicating that countries that see El Salvador and now the US buying Bitcoin would hardly continue with zero Bitcoin. A strategic move was made by US President Donald Trump, who signed a presidential decree on March 6 envisioning the establishment of a Strategic Bitcoin Reserve utilizing the government’s crypto assets. The White House crypto czar and investor David Sacks announced that the reserve would consist of Bitcoin acquired through criminal and legal asset seizure cases. In a statement on X, Sacks confirmed that initially, the government would not buy additional Bitcoin but left the door open to future acquisitions. The White House revealed that the Departments of Commerce and Treasury were authorized to develop new strategies for acquiring more Bitcoin as long as they did not impose additional costs on American taxpayers. The establishment of the US’s Bitcoin reserve garnered mixed responses in the market. While some investors viewed the government’s decision not to directly purchase Bitcoin as a disappointment, many industry experts believed that this move would have significantly positive long-term effects. With this development, it became evident that Bitcoin is being recognized as a strategic asset not just for individual and institutional investors but for governments as well. This step taken by the US might reshape Bitcoin’s role in the global economy and could prompt other countries to adopt similar policies.