US President Donald Trump signed an executive order to establish a Bitcoin reserve held by the US government. The reserve, which cryptocurrency czar David Sacks has likened to a "digital Fort Knox," will include assets collected by governments as part of criminal or civil forfeitures - currently estimated at around 200,000 bitcoins.
In addition to Bitcoin, the executive order also requires the Treasury Secretary to establish reserves of other digital assets. The executive order also allows the government to explore ways to acquire more Bitcoin as long as it does not "inflict incremental costs to U.S. taxpayers," which presumably means the U.S. should not use taxpayer money to purchase Bitcoin.
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Like other cryptocurrencies and investments, Bitcoin quotes are volatile. The price of Bitcoin has fluctuated greatly over the years, falling below $25,000 in June 2022 amid the cryptocurrency crash. At the time of writing, the price of Bitcoin is $86,000.
However, a large chunk of the U.S. government's stash consists of Bitcoin seized from Ilya "Dutch" Lichtenstein and his wife Heather Morgan (aka Razzlekkan), who stole a total of 120,000 Bitcoin from the Bitfinex exchange in 2016.
In an interview with CNBC, Finance Minister Scott Bessent said the seized assets would go into reserves "once victims have been compensated." But we still don’t know whether the government will compensate victims with the Bitcoin they actually owned at the time of the theft, or with the cash equivalent of the asset at the time, which would be worth much less.