Trump’s crypto executive order: a turning point or a strategic blunder?

The crypto market was shaken today after President Donald Trump signed an executive order establishing a Strategic Bitcoin Reserve alongside a broader U.S. Digital Asset Stockpile. While some hailed it as a historic moment, the market’s reaction told a different story. Bitcoin dropped as much as 5.7%, with Ether, XRP, Cardano, and Solana also falling at least 3%. The reason? Investors had expected the government to start actively buying Bitcoin, injecting new demand into the market. Instead, Trump’s order clarified that the reserve would only contain Bitcoin already owned by the U.S. government, primarily from forfeitures related to criminal and civil asset seizures. Any future acquisitions must be budget-neutral, meaning no additional taxpayer money would be used to buy Bitcoin.

The immediate market reaction

Crypto traders quickly unwound positions built on expectations of government buying pressure. According to Stefan von Haenisch, director of OTC trading at BitGo Inc., "Previously, investors were jumping into the market anticipating government purchases. Now, those positions are being unwound."

Even worse for the altcoin market, the executive order stated that the U.S. could sell forfeited digital assets other than Bitcoin—leaving the door open for potential liquidation of ETH, XRP, SOL, and ADA holdings.

So, while the announcement is symbolically significant—Bitcoin is now officially recognized as a reserve asset of the U.S. government—the practical implications remain unclear.

Should governments even hold Bitcoin?

The broader debate isn’t just about Trump’s specific plan, but about whether any government should hold a decentralized asset like Bitcoin in the first place.

Bitcoin was designed as an alternative to centralized monetary control, not an instrument for governments to hold as a reserve. Yet, paradoxically, some governments—including the U.S.—already own large amounts of Bitcoin due to seizures from criminal activities.

But should governments actively invest taxpayer money in crypto? Absolutely not.

1. Bitcoin is too volatile for a national reserve

Bitcoin’s price has crashed 50% or more multiple times in its history. If a government were to allocate national funds into Bitcoin and then face a major drawdown, taxpayers would be indirectly exposed to that risk. A nation’s wealth should be stored in stable assets, not speculative ones.

2. Governments cannot control bitcoin

A key principle of monetary policy is control—whether through interest rates, money supply adjustments, or direct interventions. Bitcoin, by design, cannot be manipulated in the same way. If a government relies on Bitcoin as a store of value, it becomes subject to the whims of the market, rather than maintaining control over its currency.

3. Security and custody risks

Unlike fiat reserves held in central banks, Bitcoin is a bearer asset—if you lose access to the private keys, the funds are gone forever. Holding large amounts of Bitcoin introduces security risks, making governments a major target for cyberattacks.

4. A Waste of electricity and resources

Bitcoin mining and transactions consume massive amounts of electricity. For a government to invest in Bitcoin means indirectly supporting an energy-intensive system with questionable long-term sustainability. Given the pressing need for responsible energy use, governments should focus on productive and efficient investments rather than speculative digital assets.

But is gold any better?

Some argue that gold is the traditional alternative to fiat currency, but gold has its own flaws:

• Gold is centralized – Governments and banks control most of it.

• Gold is impractical – You can’t easily use it for transactions.

• Gold can be seized – The U.S. confiscated gold in 1933 under Executive Order 6102, forcing citizens to sell at a fixed price.

The best store of value? a balanced approach

If Bitcoin is too volatile and gold is too centralized, what’s the best store of value?

A smart approach would be a diversified mix of:

• Stocks and real estate – Assets that generate long-term income.

• Commodities such as oil, lithium, and copper – Real-world demand.

• Cash or short-term bonds – For liquidity and stability.

• A small percentage in Bitcoin or gold – As a hedge, but not the core reserve asset.

What should governments do?

Instead of speculating on Bitcoin, governments should:

1. Regulate crypto properly, ensuring transparency while allowing innovation.

2. Avoid holding Bitcoin altogether, as it is too volatile, speculative, and resource-intensive.

3. Focus on stable, productive assets for national wealth management.

Trump’s executive order is historic, but it doesn’t change the fundamental reality: Bitcoin is meant to be independent of government control, and governments have no business holding it. The debate isn’t over, but for now, Bitcoin remains a private asset, not a government reserve currency.