US Crypto Stockpile Threatens Bitcoin Reserve Stability, Pro-XRP Lawyer Says

Highlights:

• A pro-XRP lawyer has revealed that the US Crypto Stockpile could devalue the Strategic Bitcoin Reserve.
• He argued that Bitcoin price could drop if other assets in the crypto stockpile outperform it.
• Morgan added that nations with diversified crypto reserves could see greater value growth than the US, which prioritizes Bitcoin.

In a March 7 tweet, pro-XRP attorney Bill Morgan warned that the Strategic Bitcoin Reserve could lose value relative to the US Crypto Stockpile. His remarks came after Donald Trump signed an Executive Order establishing the Strategic Bitcoin Reserve and US Crypto Stockpile.

According to the lawyer, Bitcoin’s price faces downward pressure if other stockpile assets outperform it. He added that market participants might overlook the strategic reserve, favoring cryptocurrencies in the digital assets stockpile.

Morgan explained:

“The market will seek value and will buy more of the better stockpile assets, which means there will be an inherent risk of the Bitcoin strategic reserve losing value against the non-Bitcoin market and US crypto stockpile.”

Broader Impacts of Limiting the Crypto Stockpile to Only Seized Assets

The attorney also criticized the government for limiting the crypto stockpile to only seized assets. This implies that, unlike the Strategic Bitcoin Reserve, the stockpile will not expand via budget-neutral acquisitions even when some of its assets begin to outperform BTC.

Morgan argued that such a policy would favor other nations with diversified reserves. Therefore, it could push the US government to adopt policies favoring Bitcoin over other cryptocurrencies to protect its reserve. The attorney termed favoring only BTC a form of market protectionism. Though an option for the US government, Morgan raised concerns that it would eliminate the level playing ground for digital assets in the crypto market.

The problem I see is that if assets in the crypto stockpile outperform BTC the market won’t care about what asset is in the strategic reserve even if is BTC. The market will seek value and will buy more of the better stockpile assets which means there will be an inherent risk of… https://t.co/TlEQdLMHpF

— bill morgan (@Belisarius2020) March 7, 2025

Key Insights into the Strategic Bitcoin Reserve and the US Crypto Stockpile

Earlier today, Trump signed an Executive Order establishing a Strategic Bitcoin Reserve. White House crypto and AI Czar David Sacks announced the move in an X post. The reserve will hold government-owned Bitcoin seized through civil forfeiture cases.

In his tweet, Sacks mentioned that the US government owns roughly 200,000 BTC, largely unaccounted for in previous administrations. He added that the Executive Order will ensure a detailed audit of the government’s digital asset holdings.

Per the AI Czar, the United States will not sell any Bitcoin deposited into the reserve. Instead, these assets will serve as a store of value for the US. He likened the reserve to a digital Fort Knox for Bitcoin, often dubbed the digital gold. Sacks noted that past Bitcoin sales cost taxpayers about $17 billion. The present government aims to prevent such costly liquidations. Hence, it established the Strategic Reserve to help maximize government Bitcoin holdings.

Meanwhile, like the Strategic Bitcoin Reserve, the US Crypto Stockpile will hold cryptocurrencies other than BTC. These assets will also be proceeds from civil forfeitures. “The purpose of the Stockpile is responsible stewardship of the government’s digital assets under the Treasury Department,” Sacks added.

Just a few minutes ago, President Trump signed an Executive Order to establish a Strategic Bitcoin Reserve.

The Reserve will be capitalized with Bitcoin owned by the federal government that was forfeited as part of criminal or civil asset forfeiture proceedings. This means it…

— David Sacks (@davidsacks47) March 7, 2025

Crypto Market Retraces Despite Positive News

Many expected the Executive Order to spark a widespread market rally. Instead, the market plummeted by about 3.4% in the past 24 hours. Bitcoin is trading below the $90,000 price mark following a 2.3% decline in its 24-hour-to-date price change variable. Ethereum is also down by 4.6%, trading at around $2,190.