The Executive Order

The President of the USA has just signed the executive order for a Strategic Bitcoin Reserve. Without doubt, this is a major milestone, and one that will without doubt turn many sovereign heads.

G’day Folks,

What a wild sequence of events.

David Sacks, the US crypto & AI Czar, has just announced that an executive order has been signed to establish a Strategic Bitcoin Reserve for the United States. As a quick summary of the key points:

• The SBR will initially hold the ~200k BTC the US government holds from seizures in criminal cases, and explicitly will not sell them.

• Ironically, the BTC holdings have not been audited, although many data providers track this, and the number is on the order of 187k BTC according to Glassnode.

• Bitcoin is explicitly called out as a store-of-value, and is put on par with the gold which may (or may not be) held in Fort Knox.

• The Secretaries of Treasury (Scott Bessent) and Commerce (Howard Lutnick) are authorized to develop budget-neutral strategies for acquiring additional bitcoin, provided that those strategies have no incremental costs on American taxpayers.

• The remaining digital assets the US holds will be held in a stockpile, but will not acquire additional holdings.

Nic Carter nicely summarised how I view this.

Overall, this is about as constructive of a result as one could ask for. Bitcoin has been explicitly separated from crypto, and the original promise Trump made at the Nashville conference to ‘never sell your Bitcoin’ is kept.

What I will highlight is that further acquisition requires strategies with no incremental costs on American taxpayers. It is very unclear how exactly this is expected to be achieved, so we will have to wait for further information. I am personally not factoring in additional net buying by the US Gov in the near-term.

In my opinion, the signalling that this EO sends is the real signal.

Bitcoin not crypto, store of value, and on par with gold, at a nation state level. It will turn heads of other sovereigns, and make it orders of magnitude easier for institutions to feel comfortable with a BTC allocation.

This is the news.

Amazing how far we have come, especially given the ETFs are barely a year old!

In today’s post, I will give a quick update on how I am thinking about this event, and a status report on the current market structure. I am going to focus on the current correction, and in particular, talk through a framework for ‘pain thresholds’ if the market was to trade lower from here.

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