Hoard but Don't Buy, Triggering Sell The News
In January of this year, Trump signed an executive order directing his administration to assess the "feasibility of establishing and maintaining a national digital asset reserve," and formed a working group led by David Sacks to study the feasibility. 10x Research analyst Marcus pointed out in a report on the strategic reserve that there is a key difference between "reserve" and "establishing and maintaining a national digital asset reserve." The term "reserve" implies a proactive strategy of acquiring more assets, while "establishing and maintaining" suggests a more passive approach, a "hoard but don't buy" strategy. Marcus mentioned in the report that although the executive order covers a broader range of digital assets beyond just BTC, this also means that the U.S. government is more inclined to continue holding the existing cryptocurrencies it has, rather than purchasing more crypto assets. On the other hand, Trump's Bitcoin strategic reserve executive order has not yet been approved by Congress, and it will still take several months before it is officially passed and takes effect, further fueling traders' Sell The News sentiment and motivation. The U.S. government's handling of currency, reserves, and financial assets is governed by laws and institutions such as the Treasury Department and the Federal Reserve. Unlike gold or oil, Bitcoin is not a physical asset that the government can traditionally store, it is a decentralized digital currency, so a reserve means the government needs to go through a series of secure and reliable formal processes to store Bitcoin, which will further raise issues regarding funding, security, and other aspects. However, many industry practitioners with close ties to the crypto-friendly administration have also expressed positive views on this executive order. White House AI and Crypto Lead David Sacks posted on social media that "the U.S. government's premature sale of Bitcoin has already cost U.S. taxpayers over $17 billion. Now, the federal government will develop a strategy to maximize the value of the Bitcoin it holds."Soul-Searching Question: Will the Bitcoin Seized in the Bitfinex Case Be Returned?
Currently, the U.S. government holds about 200,000 BTC, worth about $18 billion at current prices. These Bitcoins were seized through various law enforcement actions, the two main sources being the confiscated Bitcoin from the Silk Road case and the Bitcoin seized in the 2016 Bitfinex platform hack. In February 2022, the U.S. Department of Justice (DOJ) seized over 94,000 BTC from the Bitfinex hack case. The hackers, Ilya Lichtenstein and Heather Morgan, were arrested and convicted for money laundering, and Lichtenstein admitted to planning the hack, after which the U.S. government held the seized Bitcoin as forfeited assets. After the signing of the Bitcoin strategic reserve executive order, "Will the Bitfinex Bitcoin be returned?" has become a major concern for many industry participants, as this portion accounts for nearly 50% of the U.S. government's Bitcoin holdings. The key reason is Bitfinex's hack compensation plan: after the 2016 hack, Bitfinex reduced all customer balances by 36% and issued BFX (LEO) tokens, which were fully redeemed within eight months, effectively making the customers "whole" in the government's view. Therefore, the entity that bore the loss, Bitfinex, is seen as the primary claimant. In October 2024, the U.S. Attorney's Office for the District of Columbia filed a motion suggesting that Bitfinex may be the sole "victim" eligible for compensation under the Crime Victims' Rights Act (CVRA) and the Mandatory Victims Restitution Act (MVRA). This position was further strengthened in a January 2025 filing, where the government proposed to return the Bitcoin "in kind" (BTC, not cash) to Bitfinex. Previously, Bitfinex had promised that once it regained the Bitcoin stolen by the hackers, it would buy back the LEO tokens. Many former Bitfinex customers believe that given the significant appreciation of Bitcoin since 2016, they are entitled to the recovered Bitcoin, and argue that the LEO token compensation did not reflect the future value of BTC. So after the news broke in October 2024 that the U.S. government had applied for the alternative notice procedure to notify potential victims of the 2016 Bitfinex hack, the Bitfinex platform token LEO quickly surged nearly 40%, indicating the market's high expectations for the U.S. government to return the stolen Bitcoin and Bitfinex's buyback plan. Of course, with the signing of the strategic reserve executive order, the U.S. government's position may change at any time.What else can we expect from the White House Crypto Summit?
In addition, David Sacks mentioned in his tweet this morning that the executive order also established a "U.S. Digital Asset Reserve," which is responsible for managing the government's digital assets under the leadership of the Treasury Department.
For David Sacks, the upcoming White House Crypto Summit is the top priority right now. This summit is the first of its kind hosted by the White House, and the level is very high. According to multiple media reports, the most eye-catching part of this summit may be the "National Crypto Strategic Reserve" plan. This plan aims to include mainstream cryptocurrencies such as BTC, ETH, Solana, Cardano, and XRP into the national reserve system, with a scale and functional positioning similar to the traditional oil reserve. According to Forbes, the selection of reserve assets takes into account the characteristics of each cryptocurrency: BTC's anti-inflation properties as "digital gold", ETH's smart contract ecosystem, Solana's high-performance application platform, Cardano's research-driven secure architecture, and Ripple's cross-border payment efficiency advantages.
In terms of regulatory system building, the summit will focus on the top-level design of stablecoins and the overall regulatory framework. Cointelegraph revealed that Trump advisor David Sacks advocates strengthening the US dollar hegemony through stablecoins, and this view may influence the federal regulatory plan. The draft bill currently being advanced by the House Financial Services Committee shows that stablecoin institutions with issuance exceeding $100 billion may be included in the Federal Reserve's regulatory system, forming a two-tier regulatory framework between the federal and state governments. Meanwhile, the "21st Century Financial Innovation and Technology Act" proposed in 2023 may see substantial progress, the core of which is to coordinate the regulatory responsibilities of the SEC and CFTC, and build a digital asset regulatory paradigm that balances innovation and security.
To achieve the strategic goal of becoming a "Crypto Capital," the summit may introduce a series of innovative incentives and tax-related policies. CryptoBriefing analysis points out that the government may relax the regulatory restrictions of the Biden era. An unexpected detail is that the summit may also discuss tax reforms related to cryptocurrencies. According to BeInCrypto's report, tax reform may be part of the agenda, which may affect investors' tax burden, involving simplifying the tax reporting of crypto transactions or providing tax incentives to promote industry growth.
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