Author: Spirit, Golden Finance

Trump signed an executive order at 8 am on March 7, 2024, Beijing time to establish a strategic Bitcoin reserve and digital asset reserve library, marking the formal inclusion of Bitcoin in the strategic asset system of the United States. This historic move not only gives Bitcoin strategic significance, but also triggers widespread discussions on volatility and geographic competition in global crypto markets.

1. Background and significance

The executive order signed by Trump positioned Bitcoin as a strategic asset, aiming to consolidate the United States' financial dominance in the era of digital currency and seize the initiative in the formulation of global crypto asset rules. Against the backdrop of the dollar's dominance facing the challenge of de-dollarization and the scale of Treasury bonds exceeding $34 trillion, the scarcity of Bitcoin is seen as a modern tool to hedge against inflation and debt crises, similar to "digital gold." This move not only improves the legitimacy of Bitcoin, but may also push the global regulatory framework to tilt towards the United States and attract more institutional investors to enter the market.

2. Operation mechanism of strategic Bitcoin reserves and digital asset reserves

According to David Sacks, director of AI and cryptocurrency at the White House, this core mechanism is as follows:

Strategic Bitcoin reserves:

Initial scale: Based on approximately 198,000 bitcoins held by the United States (derived from criminal and civil confiscation procedures), the total value is approximately US$17.3 billion based on the current price (US$87,700 per coin).

How to operate: Authorized to explore ways to obtain more Bitcoin without increasing the burden on taxpayers, but explicitly not to actively purchase. The executive order requires a comprehensive audit of holdings and stipulates that Bitcoin is not sold as a store of value, reducing potential selling pressure of about $18 billion (estimated by Coinbase Director Conor Grogan).

Mechanism features:

Do not rely on fiscal appropriations and avoid direct market intervention.

Empress "responsible management" to reduce market selling pressure through long-term holdings and strengthen Bitcoin's store of value.

3. Impact on the market and the global landscape Market impact

Short-term fluctuations: A few days before the announcement, the market experienced a FOMO effect, and the price of Bitcoin once soared to US$95,000, but after the details were implemented this morning, it fell back to US$84,667, reflecting investors' disappointment with limited scope (only for confiscation of assets and no large-scale purchase).

Long-term positives: Matt Hougan, chief investment officer of Bitwise, pointed out that holdings reduce selling pressure and endorse Bitcoin, "extremely beneficial" its long-term value. Local mining industries (such as Riot Blockchain) and custodians (such as Coinbase) may cooperate in depth to reconstruct the industrial chain structure.

Global competitive landscape

Geostrategic Signal: The US move may stimulate others to follow suit and form a competitive landscape for Bitcoin reserves. For example, or indirectly holding Bitcoin through Hong Kong, RussiaIt may be used to bypass SWIFT sanctions, such as El Salvador, to use it as a sovereign asset.

Financial Strategy Adjustment: Against the backdrop of increasing global economic uncertainty, Bitcoin may become part of the "mixed reserve system" (the coexistence of gold, US dollar, and Bitcoin).

4. Latest crypto asset price changes and market analysis

As of March 7, 2025, after the issuance of Trump's executive order, the crypto asset market experienced significant fluctuations and showed a downward trend in the short term. The following is the latest data:

Bitcoin (BTC)

Price: fell about 3% in 2 hours to about $87,000 per coin

Reason: The market is disappointed that it has not purchased Bitcoin on a large scale, and macro pressure (such as the Federal Reserve hawks) has caused funds to flow out of high-risk assets.

Ethereum (ETH)

Price: 4% drop in 2 hours to about $2,160.

Other crypto assets (Altcoins)

Trend: Some altcoins fell by as much as 60% from their 2025 highs, the market showed the characteristics of "severe differentiation". Bitcoin is relatively stable, and altcoins are under obvious pressure.

Forecast: This trend is expected to continue until mid-March or mid-April 2025, when retail withdrawals and whale accumulation may trigger a new round of upward momentum.

Market Analysis:

Limitations: Only using confiscated assets, no new funds were injected, and failed to fully boost market confidence.

Macro environment: Fed currency tightening and Trump tariffs have intensified risk aversion.

Experts: James Butterfill, head of research at CoinShares, believes that the market is disappointed with the details; BitMEX co-founder Arthur Hayes warned that if US dollar liquidity tightens in the second quarter of 2025, the market may adjust further.

5. Bitcoin arms race: local competition has begun, and a comprehensive Cold War is in place. Trump's executive order pushes the United States to the forefront of global crypto asset competition. Local competition is inevitable, but whether it evolves into a comprehensive "crypto Cold War" remains to be observed.

Signs of local competition

: Possible indirect holding of Bitcoin through Hong Kong.

Russia: Use Bitcoin to bypass sanctions and diversify reserves.

Small: Following the example of El Salvador and bring Bitcoin into sovereign assets.

In the short term, the United States' establishment of Bitcoin reserves will force some (especially resource exporters and financially vulnerable countries) to follow up and form a "digital gold" reserve race. However, the comprehensive arms race needs to meet three conditions: Bitcoin’s technological stability passes the level stress test; major economies reach a minimum regulatory consensus; and irreversible trust collapse in the traditional fiat currency system (such as US dollar hyperinflation).

The next 5-10 years are more likely to beThe current "hybrid reserve system": countries are dynamically balancing between gold, US dollar, Bitcoin, and CBDC, and the role of Bitcoin is similar to "crisis hedging options" rather than mainstream reserve assets. But if the global order accelerates fragmentation, the cryptocurrency arms race will become the new normal.

Summary

The executive order signed by Trump has given Bitcoin strategic significance through a zero-cost operating mechanism, with clear long-term benefits, and may reshape the global financial and competitive landscape. However, in the short term, the market fell due to limited details and macroeconomic pressure, with Bitcoin price falling back to $87,700, and the altcoin fell even more. Some signs of the Bitcoin arms race have been revealed, but the full development requires more cooperation and stable market support. Investors should pay attention to the potential upward momentum from mid-March to April 2025, while also being alert to the complex impact of changes in the global landscape.