Author: Spirit, Jinse Finance
On March 7, 2024 at 8 AM Beijing time, former President Trump signed an executive order to establish a strategic Bit reserve and digital asset reserve, marking the formal inclusion of Bit into the United States' national strategic asset system. This historic move not only grants Bit national strategic significance, but has also sparked widespread discussion on global crypto market volatility and geopolitical competition.
I. Policy Background and Significance
The executive order signed by Trump positions Bit as a national strategic asset, aiming to consolidate the US' financial dominance in the digital currency era and seize the initiative in shaping global crypto asset regulations. Against the backdrop of the US dollar's declining dominance and the national debt exceeding $34 trillion, Bit's scarcity is seen as a modern tool to hedge against inflation and debt crises, similar to "digital gold". This move not only enhances Bit's legitimacy, but may also tilt the global regulatory framework towards the US, attracting more institutional investors.
II. Operation Mechanism of the Strategic Bit Reserve and Digital Asset Reserve
According to White House AI and Crypto Czar David Sacks, the core mechanisms of this policy are as follows:
Strategic Bit Reserve:
Initial Scale: Based on the approximately 198,000 Bits held by the US government (from criminal and civil forfeiture proceedings), valued at around $173 billion at the current price ($87,700/Bit).
Operation: The government is authorized to explore ways to acquire more Bits without increasing the tax burden, but is explicitly prohibited from actively purchasing. The executive order requires a comprehensive audit of the holdings and stipulates that Bits will be held as a store of value and not sold, reducing potential sell-off pressure of around $18 billion (estimated by Coinbase executive Conor Grogan).
Mechanism Highlights:
No reliance on fiscal appropriations, avoiding direct market intervention.
Emphasis on "responsible management" by long-term holding to reduce market sell-off pressure and strengthen Bit's status as a store of value.
III. Impact on the Market and Global Landscape
Market Impact
Short-term Volatility: In the days before the policy announcement, the market experienced a FOMO effect, with Bit prices briefly spiking to $95,000, but falling back to $84,667 this morning as the details were unveiled, reflecting investors' disappointment with the limited scope of the policy (only utilizing forfeited assets, no large-scale purchases).
Long-term Positive: Bitwise Chief Investment Officer Matt Hougan points out that the government's holdings will reduce sell-off pressure and provide national endorsement for Bit, "extremely beneficial" for its long-term value. Domestic miners (such as Riot Blockchain) and custodians (such as Coinbase) may deepen cooperation with the government, reshaping the industry landscape.
Global Competition Landscape
Geopolitical Strategic Signal: This move by the US may stimulate other countries to follow suit, leading to a competitive landscape of Bit reserves. For example, China may indirectly hold Bits through Hong Kong, Russia may use Bit to bypass SWIFT sanctions, and small countries like El Salvador may adopt it as a sovereign asset.
Financial Strategy Adjustment: Against the backdrop of heightened global economic uncertainty, Bit may become part of a "mixed reserve system" (coexisting with gold, the US dollar, and Bit).
IV. Latest Crypto Asset Price Movements and Market Analysis
As of March 7, 2025, following the issuance of the Trump executive order, the crypto asset market has experienced significant volatility, exhibiting a downward trend in the short term. The latest data is as follows:
Bit (BTC)
Price: Dropped about 3% within 2 hours, to around $87,000 per Bit.
Reason: Market disappointment with the government's lack of large-scale Bit purchases, coupled with macroeconomic pressures (such as the Federal Reserve's hawkish policies) leading to capital outflows from high-risk assets.
Ethereum (ETH)
Price: Dropped 4% within 2 hours, to around $2,160.
Other Altcoins
Trend: Some Altcoins have fallen up to 60% from their 2025 highs, with the market exhibiting a "severe divergence" characteristic, where Bit remains relatively stable while Altcoins are under significant pressure.
Forecast: This trend is expected to continue until mid-March or mid-April 2025, at which point the exit of retail investors and accumulation by whales may trigger a new round of upward momentum.
Market Analysis:
Policy Limitations: Only utilizing forfeited assets, without injecting new capital, unable to fully restore market confidence.
Macroeconomic Environment: Tightening of Federal Reserve monetary policy and escalation of Trump's tariff policies have exacerbated risk-off sentiment.
Expert Opinions: CoinShares Research Head James Butterfill believes the market is disappointed with the policy details; BitMEX co-founder Arthur Hayes warns that if US dollar liquidity tightens in the second quarter of 2025, the market may further adjust.
V. Bit Arms Race: Local Competition Has Begun, but a Comprehensive Cold War Awaits Conditions
Trump's executive order has pushed the US to the forefront of the global crypto asset competition, with local competition inevitable, but whether it will evolve into a comprehensive "crypto cold war" remains to be observed.
Signs of Local Competition
China: May indirectly hold Bits through Hong Kong.
Russia: Utilize Bit to bypass sanctions and diversify its reserves.
Small Countries: Follow El Salvador's example and incorporate Bit into sovereign assets.
In the short term, the US establishing a Bit reserve will force some countries (especially resource-exporting and financially vulnerable nations) to follow suit, leading to a "digital gold" reserve competition. However, a comprehensive arms race requires three conditions:
Bit's technical stability passing national-level stress tests;
Major economies reaching a minimum regulatory consensus;
An irreversible collapse of trust in the traditional fiat currency system (such as hyperinflation of the US dollar).
Over the next 5-10 years, a "mixed reserve system" is more likely to emerge, with countries dynamically balancing among gold, the US dollar, Bit, and CBDCs, with Bit playing a role similar to a "crisis hedging option" rather than a mainstream reserve asset. However, if global order accelerates fragmentation, the crypto currency arms race will become the new normal.
Summary
The executive order signed by Trump, through a zero-cost operation mechanism, has granted Bit national strategic significance, with clear long-term positive implications that may reshape the global financial and competitive landscape. However, in the short term, the market has declined due to the limited policy details and macroeconomic pressures, with Bit prices falling back to $87,700 and Altcoins experiencing larger declines. While signs of a Bit arms race have emerged locally, a comprehensive escalation requires more international cooperation and market stability. Investors should pay attention to the potential upward momentum in mid-March to mid-April 2025, while also being alert to the complex implications of changes in the global landscape.
