Treasury to use forfeited Bitcoin for Strategic Reserve, buy more in budget-neutral

he U.S. Treasury has officially announced its plans for the Strategic Bitcoin Reserve, a new initiative established by a presidential executive order in March. This program will be built on two key pillars: using forfeited Bitcoin as a foundation and exploring “budget-neutral” ways to acquire more.

Here are the key details of the plan:

Foundation of Forfeited Assets: The reserve will be initially capitalized with Bitcoin that has been seized by the federal government through criminal and civil forfeiture proceedings.

No Sales, Only Accumulation: The Treasury has confirmed that it will not sell any of the Bitcoin held in the reserve, treating it as a permanent reserve asset.

Budget-Neutral Acquisitions: To expand the reserve beyond seized funds, the Treasury will explore methods to acquire additional Bitcoin without using new taxpayer money or increasing the national debt. One potential idea, proposed by Senator Cynthia Lummis, involves revaluing the Treasury’s gold reserves at current market prices and using the resulting paper surplus to buy Bitcoin.

he U.S. Treasury has officially announced its plans for the Strategic Bitcoin Reserve, a new initiative established by a presidential executive order in March. This program will be built on two key pillars: using forfeited Bitcoin as a foundation and exploring “budget-neutral” ways to acquire more.

Here are the key details of the plan:

Foundation of Forfeited Assets: The reserve will be initially capitalized with Bitcoin that has been seized by the federal government through criminal and civil forfeiture proceedings.

No Sales, Only Accumulation: The Treasury has confirmed that it will not sell any of the Bitcoin held in the reserve, treating it as a permanent reserve asset.

Budget-Neutral Acquisitions: To expand the reserve beyond seized funds, the Treasury will explore methods to acquire additional Bitcoin without using new taxpayer money or increasing the national debt. One potential idea, proposed by Senator Cynthia Lummis, involves revaluing the Treasury’s gold reserves at current market prices and using the resulting paper surplus to buy Bitcoin.

Contradictory Statements and Market Reaction: The announcement followed some conflicting messages from Treasury Secretary Scott Bessent. After initially stating that the government would not be buying Bitcoin, he clarified in a subsequent social media post that the department is committed to exploring budget-neutral pathways to acquire more. This back-and-forth caused a brief dip in Bitcoin’s price, though it remains significantly higher than its value before the new administration took office.

The Strategic Bitcoin Reserve is a significant policy shift, aiming to establish the U.S. as a leader in the digital asset space and create a formal structure for managing the government’s cryptocurrency holdings. The current value of the reserve is estimated to be between $15 and $20 billion, all from seized funds.

Contradictory Statements and Market Reaction: The announcement followed some conflicting messages from Treasury Secretary Scott Bessent. After initially stating that the government would not be buying Bitcoin, he clarified in a subsequent social media post that the department is committed to exploring budget-neutral pathways to acquire more. This back-and-forth caused a brief dip in Bitcoin’s price, though it remains significantly higher than its value before the

new administration took office.

The Strategic Bitcoin Reserve is a significant policy shift, aiming to establish the U.S. as a leader in the digital asset space and create a formal structure for managing the government’s cryptocurrency holdings. The current value of the reserve is estimated to be between $15 and $20 billion, all from seized funds.