4 Reasons Why Trump’s Bitcoin Reserve is Actually Bullish, According to Crypto Executives

On March 7, 2025, U.S. President Donald Trump signed an executive order to establish a Strategic Bitcoin Reserve (SBR) and a Digital Asset Stockpile. While the news initially caused a brief dip in the price of Bitcoin, many crypto industry leaders argue that the establishment of a U.S. Bitcoin reserve could be a highly bullish development for the cryptocurrency market. Below are four key reasons why Trump’s decision could ultimately be positive for Bitcoin's future.

1. Reduced Likelihood of a Bitcoin Ban

One of the most significant impacts of the U.S. establishing a Strategic Bitcoin Reserve is that it dramatically reduces the chances of the U.S. government ever imposing a ban on Bitcoin. According to Matt Hougan, Chief Investment Officer at Bitwise, the creation of a government reserve implies that Bitcoin is no longer a fringe asset in the eyes of the U.S. government.

In the past, Bitcoin has faced skepticism from regulatory bodies, but by formally integrating it into a government-backed reserve, the U.S. is sending a clear signal that Bitcoin is here to stay. This development makes it much less likely that the government would move toward outright prohibitions or severe restrictions on Bitcoin.

In fact, in November 2024, the Federal Reserve Bank of Minneapolis had suggested that Bitcoin could play a role in balancing the federal budget. Such considerations underscore the growing recognition of Bitcoin’s potential, both as a digital asset and as a means of preserving financial stability.

2. Encouraging Other Nations to Follow Suit

The U.S. Bitcoin reserve sets a precedent that could inspire other countries to establish their own Bitcoin reserves. Hougan suggests that the reserve creates a “short window” for other nations to “front-run” potential Bitcoin purchases by the U.S. government. This could lead to a global trend of countries recognizing the value of Bitcoin as a reserve asset.

Currently, the U.S. leads in terms of Bitcoin holdings, with over 200,000 BTC, valued at approximately $18 billion. Other countries, such as China and the United Kingdom, also hold significant amounts of Bitcoin, though the U.S. has solidified its position as a leader in this space. The move by the U.S. could accelerate the pace at which other countries, especially G20 nations, begin considering Bitcoin for their own national reserves.

Brian Armstrong, CEO of Coinbase, predicts that the U.S. government’s lead will push other countries to follow its example, marking a turning point in the way global nations view Bitcoin.

3. Legitimizing Bitcoin in the Eyes of Financial Institutions

Another key benefit of a U.S. Bitcoin reserve is that it makes it much harder for major institutions, such as the International Monetary Fund (IMF), to dismiss Bitcoin as a risky or inappropriate asset. For years, the IMF and other international bodies have raised concerns about Bitcoin’s volatility and potential risks, particularly in relation to countries like El Salvador, which made Bitcoin legal tender in 2021.

However, with the U.S. now holding Bitcoin as part of its official reserves, the narrative around Bitcoin’s legitimacy is shifting. As Hougan points out, it will become increasingly difficult for institutions to argue that Bitcoin should be treated with suspicion or disdain. This move also underscores the institutional acceptance of Bitcoin as a store of value and a serious asset class.

In fact, Ryan Rasmussen, head of research at Bitwise, further elaborated that the creation of the Strategic Bitcoin Reserve means that financial institutions, wealth managers, and even pension funds will now have fewer excuses not to include Bitcoin in their portfolios. The perception of Bitcoin as a high-risk, high-reward asset is being replaced with the view that it can be a stable and significant part of an institution’s asset allocation.

4. Eliminating Fears of U.S. Government Selling Bitcoin

Many critics of Bitcoin have long feared that the U.S. government could flood the market by selling off its Bitcoin holdings. However, the executive order establishing the Strategic Bitcoin Reserve explicitly states that the government will hold Bitcoin as a store of value, not for short-term speculation.

This assurance has a major impact on market sentiment, particularly for institutional investors who have been hesitant to invest in Bitcoin due to fears of government sales. Ryan Rasmussen argued that the creation of this reserve removes that uncertainty, making it more likely that both state governments and private institutions will increase their Bitcoin holdings.

Bitcoin’s Long-Term Potential: A Changing Landscape

The announcement of the U.S. Strategic Bitcoin Reserve also signals the increasing importance of Bitcoin in the global financial ecosystem. John Deaton, a prominent crypto lawyer, noted that Treasury Secretary Scott Bessent and Secretary of Commerce Howard Lutnick have been tasked with finding “budget-neutral” ways to acquire Bitcoin. This marks a dramatic shift in how Bitcoin is viewed within the U.S. government.

Only a year ago, many regulators were still debating the merits of a Bitcoin ETF, with approval for the first-ever U.S. spot Bitcoin ETF still pending. Today, however, Bitcoin is not only gaining approval from regulators but also being embraced by the federal government as part of its official reserves.

Conclusion

While the announcement of the U.S. Strategic Bitcoin Reserve initially caused a brief dip in Bitcoin’s price, industry experts see the move as highly bullish for Bitcoin in the long run. By reducing the likelihood of a Bitcoin ban, setting a precedent for other nations to follow, legitimizing Bitcoin in the eyes of institutions, and eliminating fears of government sell-offs, the U.S. has significantly strengthened Bitcoin’s position in the global economy.

As Bitcoin’s role in national reserves continues to grow, other countries may soon recognize the benefits of adopting Bitcoin as a strategic asset, leading to further institutional adoption and a more secure future for the cryptocurrency.