In March 2025, President Trump took a historic gamble on digital finance by signing an executive order to establish the “Strategic Bitcoin Reserve” and the “United States Digital Asset Stockpile.”
This policy effectively turned the U.S. into a “HODLer” (a long-term crypto investor), mandating that the government retain all Bitcoin seized in criminal or civil forfeitures rather than auctioning it off as it had for over a decade.
Spearheaded by the administration’s “Crypto Czar” David Sacks and Executive Director Patrick Witt, the initiative was framed as a “Digital Fort Knox” intended to secure America’s lead in the global financial race. By treating Bitcoin as a permanent reserve asset similar to gold bullion, the administration officially signaled its intent to make the U.S. the “crypto capital of the world,” a move bolstered by the subsequent passage of the GENIUS Act to regulate stable coins and a push for the CLARITY Act to define market structures.
The “Strategic Reserve” Order and the Policy Pivot
However, the “strategic” nature of the reserve has been tested by extreme market volatility over the last year. When the order was signed in early 2025, the government’s stash of approximately 200,000 Bitcoins was valued at roughly $18.5 billion. While Bitcoin hit a staggering all-time high of $126,000 in October 2025, the market has since cooled significantly. By February 2026, the price has retreated to roughly $69,000—a 45% drop from its peak.
This downturn has resulted in unrealized losses of approximately $4.7 billion in market value for the federal stockpile compared to its inception date. Despite these paper losses, the administration has doubled down, with Treasury Secretary Scott Bessent recently reiterating that the U.S. will maintain its “no sell” pledge for Bitcoin, citing the asset’s long-term “hedge” potential against dollar erosion.
Democratic Backlash: “Ethics” and “Retirement at Risk”
Democrats have launched a coordinated offensive against the reserve, framing it as a departure from sound fiscal management and a vehicle for potential executive conflicts of interest. Senator Elizabeth Warren, the ranking member of the Senate Banking Committee, has been the most vocal critic, recently demanding answers from the SEC regarding how this “volatile playground” affects national stability.
Warren and other Democrats, such as Representative Jamie Raskin, argue that the reserve lacks sufficient guardrails to prevent self-dealing. Raskin recently released a report questioning the ethics of a national policy that “pumps” the value of digital assets while the President’s family business, World Liberty Financial, remains active in the same space.
Beyond allegations of conflict, Democrats are focusing on the broader risk to the American financial system. They argue that the administration’s pivot, which includes rescinding SEC guidance that once limited crypto-custody by banks, is a “race to the bottom” in global financial regulation.
Senator Brad Sherman has mockingly referred to the reserve as “taxpayer-funded market manipulation,” arguing that the government is effectively acting as a “buyer of last resort” for a speculative asset class. Meanwhile, Senate Banking Democrats like Raphael Warnock have successfully stalled the CLARITY Act, insisting that any bill defining market structure must include strict “ethics” provisions that prohibit elected officials from profiting off federal crypto initiatives.
For the opposition, the $4.7 billion decline in value is a quantitative argument for returning to the previous policy of auctioning seized assets to fund law enforcement.
