U.S. government changes stance: 200,000 confiscated Bitcoins will become strategic reserves!

The U.S. Secretary of the Treasury announced at Davos that over 200,000 confiscated bitcoins will no longer enter the auction market but will instead be held as long-term national assets. This shift marks the first time that Bitcoin has achieved a strategic status close to gold at the national policy level.

The United States announced at the Davos World Economic Forum that it will cease auctioning off confiscated bitcoins and will retain them as part of the national strategic reserve.

This policy change is expected to directly impact the market supply of over 200,000 bitcoins, currently valued at over $10 billion. Under the new policy, these assets will be permanently held and only potentially used in cases of “extreme national economic emergencies.”

1. Policy Turning Point: From Auction to Strategic Reserve

● The U.S. Department of the Treasury has long confiscated digital assets like Bitcoin through the Department of Justice, typically auctioning them to the public on a regular basis. This traditional practice has generated billions of dollars in revenue for the U.S. government over the past decade but has also sparked discussions about its long-term strategic value.

● In March 2025, the White House issued an executive order proposing for the first time the establishment of a “Strategic Bitcoin Reserve” and “U.S. Digital Asset Inventory.” The order explicitly states: “Just as gold reserves have historically been the cornerstone of national financial security, Bitcoin represents a digital-era asset that can enhance America’s financial leadership and security in the 21st-century global economy.”

This executive order laid the groundwork for subsequent policies and paved the way for the announcement at Davos.

● U.S. Treasury Secretary Scott Bessent officially announced this shift at the Davos forum. He stated that the move aims to “stop the loss of sovereign digital wealth” and considers the more than 200,000 bitcoins currently held as a long-term value reserve on the national balance sheet.

2. Strategic Reserve Details: A National-Level Management Framework for Bitcoin

● According to the new policy, the strategic Bitcoin reserve will be expanded through a “budget-neutral” approach. This means the government will not use taxpayer funds to purchase Bitcoin on the open market but will acquire new assets through law enforcement confiscation.

This funding strategy reduces fiscal pressure while ensuring steady growth of the reserve.

● These Bitcoin assets will be managed by the Federal Reserve, establishing a strict custody mechanism. Notably, the Bitcoin Act submitted to Congress in July 2024 proposed creating a “Strategic Bitcoin Reserve,” requiring Bitcoin to be stored via “cold storage,” and suggested establishing a nationwide secure storage facility network.

● The new policy inherits this approach, establishing a comprehensive security framework with strict requirements for both physical and digital security. According to the White House executive order, these assets are explicitly defined as “Government Bitcoin,” including all Bitcoin ultimately confiscated through criminal or civil asset forfeiture procedures by the Treasury.

3. Economic and Market Impact: Disappearance of Government Selling Pressure and Revaluation of Value

● The most immediate market impact of this policy shift is the elimination of long-term “government selling pressure.” For years, market participants have expected confiscated Bitcoin to be regularly auctioned into the market, which suppressed prices.

The U.S. Department of the Treasury is no longer a seller of Bitcoin but instead a long-term holder, fundamentally changing Bitcoin’s supply and demand dynamics.

● Analysts note that this move signifies that, at the policy level, the U.S. has for the first time elevated Bitcoin to a strategic asset status close to gold. Against the backdrop of major global economies facing currency fluctuations and inflation pressures, Bitcoin’s role as “digital gold” as a safe haven has gained national recognition.

This policy shift could set an example for other countries, encouraging more sovereign nations to consider Bitcoin as part of their reserve assets.

● During the Davos forum, Bessent also emphasized a broader economic agenda: “Growth, baby, growth” is the U.S. agenda for all allies, and fair trade is crucial. In this context, the establishment of Bitcoin reserves is seen as a strategic move for the U.S. to maintain financial leadership in the digital age.

4. Legal and Regulatory Evolution: From Biden Executive Orders to Trump Administration Policies

● The U.S. government’s stance on digital asset regulation has evolved significantly. As early as 2022, President Biden signed an executive order requiring federal agencies to study digital assets and create regulatory frameworks. The order focused on protecting investors, consumers, and businesses, while also calling for research into the creation of a U.S. central bank digital currency.

● Industry observers believe Biden’s executive order is “clearly bullish on the crypto ecosystem across all timeframes” and explicitly states that “the U.S. government is not banning cryptocurrencies but embracing them.”

● Kristin Smith, executive director of the Blockchain Association, noted: “Not long ago, policymakers viewed cryptocurrencies with confusion, ridicule, or indifference.”

● After the Trump administration took office, policies accelerated. The White House executive order in March 2025 explicitly states: “Due to Bitcoin’s scarcity and security, it is often called ‘digital gold.’”

5. Global Demonstration Effect: Potentially Reshaping Countries’ Digital Asset Strategies

● This policy shift by the U.S., as the world’s largest economy, is expected to set an example for other major economies’ digital asset policies. Especially within the dollar-dominated international financial system, the U.S. strategic positioning of Bitcoin may trigger a chain reaction.

● At Davos, Bessent also touched on international relations. When asked about Switzerland possibly deviating from its traditional neutrality, he said: “If Switzerland decides to join the EU trend, that would be very disappointing.” He praised Switzerland as an “industrial powerhouse” and warned against emulating the EU’s “administrative, bureaucratic, and economic rigidity.”

● Regarding trade tensions triggered by the Greenland issue, Bessent remained calm: “I am not worried at all about any sell-off of U.S. Treasuries due to Greenland.” This geopolitical confidence extends into the digital asset realm, as the U.S. appears to be ensuring its financial dominance in the digital age by establishing Bitcoin reserves.

6. Future Outlook: Long-term Impact and Challenges of Strategic Reserves

● With over 200,000 bitcoins officially incorporated into the U.S. strategic reserve, questions remain about the management and future use of these assets. According to the policy framework, these bitcoins can only be sold or transferred in cases of “extreme national economic emergencies.”

However, the specific definition of “extreme national economic emergencies” remains unclear, leaving flexibility for future policy implementation.

● Early legislative proposals suggest that Bitcoin reserves may have a minimum holding period of at least 20 years, during which they cannot be sold, exchanged, auctioned, mortgaged, or otherwise disposed of unless to repay federal debt instruments.

● In the long term, this policy could further blur the boundaries between traditional finance and digital finance, encouraging more institutional investors to view Bitcoin as a legitimate asset class. The amount of Bitcoin held by the U.S. government now exceeds the value of many countries’ gold reserves, which in itself could prompt more sovereign funds and central banks to reassess their reserve strategies.

As digital assets play an increasingly important role in the global financial system, this U.S. move may only be the beginning of national-level acceptance and integration of cryptocurrencies.

When asked about the potential market volatility caused by Greenland issues, U.S. Treasury Secretary Bessent casually remarked at Davos: “I’m not worried at all.” This attitude aligns with the decision to incorporate confiscated Bitcoin into the national strategic reserve.

Whether addressing geopolitical frictions or planning financial strategies for the digital era, the U.S. government is attempting to keep the initiative firmly in its hands. The 200,000 bitcoins no longer flow into the market but become long-term reserve assets on the national balance sheet, marking the world’s largest economy’s official recognition of Bitcoin as “digital gold” with strategic value.