What Trump’s Bitcoin reserve means for investors – the US crypto fund explained

IN March, the White House made a huge announcement: the US is creating a special crypto reserve.

President Donald Trump says this is all part of a plan to make America the “Crypto capital of the world”. But what does it mean for crypto investors?

The eToro Academy: Crypto
(A beginner’s guide)

Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong. Take two to minutes to learn more.

The newly-created reserve fund will include all the major cryptocurrencies: Bitcoin, Ethereum, Ripple, Solana, and Cardano. 

But this bold new move from the Trump administration has met with a polarised response.

If you want to dive deeper into Bitcoin or explore the world of cryptocurrency, eToro’s Academy is an excellent place to begin.

There, you can discover the fundamentals of crypto investing, including step-by-step guides on how to buy Bitcoin for the first time and tips on managing your crypto investments wisely.

However, it’s important to keep in mind that Bitcoin isn’t a sure-fire way to get rich: it’s a highly volatile and risky asset. Keep reading to learn more.

What is the Strategic Bitcoin Reserve?

It was President Trump who signed the executive order to create a Strategic Bitcoin Reserve, but it was originally first proposed by Republican senator Cynthia Lummis back in July 2024.

It was blocked by a Democrat senator. But then, of course, Trump won the election in November and the Reserve is now a reality.

It will only include Bitcoin that law enforcement has seized from criminals, so no taxpayer money will be spent to buy more funds. 

The concept is exactly the same as traditional reserve funds, such as those for gold or oil, which the US has saved for emergency situations.

A statement on the White House website reads as follows:

“Bitcoin, the original cryptocurrency, is referred to as “digital gold” because of its scarcity and security, having never been hacked.

“With a fixed supply of 21 million coins, there is a strategic advantage to being among the first nations to create a Strategic Bitcoin Reserve.

“The United States currently holds a significant amount of bitcoin but has not maximized its strategic position as a unique store of value in the global financial system.

“Premature sales of bitcoin have already cost U.S. taxpayers over $17 billion.”

How does this affect investors?

Some people think creating a crypto reserve could make the US economy more stable because it would add diversity to the country’s savings: a new asset alongside its gold and foreign currencies. 

Others believe this could make cryptocurrencies more legitimate and trusted, especially among big financial companies that are still unsure about crypto due to its volatility.

But not everyone is confident in the idea: there’s a chance the value of the reserve could disappear if the crypto market crashes, which has happened before. 

Some critics also worry about how expensive it would be if the government decided to buy Bitcoin at its all-time high price of $109,000, especially since Trump is trying to cut spending in other areas. 

However, Trump’s team says using Bitcoin that was seized from criminals means it won’t cost taxpayers anything. 

Others don’t like the idea of the government holding Bitcoin because it was originally created to avoid government control. 

There’s also concern that if more governments start stockpiling crypto, they might try to manipulate the market, similar to how they influence the price of gold and regular money. 

What does Donald Trump think about crypto?

Donald Trump’s views on cryptocurrency have changed a lot over the years. 

During his first presidency, he often spoke out against Bitcoin and other cryptocurrencies. But now, he’s a big fan and even calls himself the “crypto president.” 

Trump’s vice-present, JD Vance, is also a Bitcoin supporter and is the first known veep who owns crypto.

Trump and his family have also jumped into the crypto world by launching their own tokens. 

The $Trump coin features a picture of Trump raising his fist alongside the quote “Fight Fight Fight”, which became a slogan after his assassination attempt in July 2024.

What is Bitcoin?

Bitcoin is a type of cryptocurrency, which is basically a form of digital money. 

Unlike coins or cash you can hold in your hand, Bitcoin only exists online as computer code. 

If you own Bitcoin, you keep it in something called a digital wallet, which is protected by a long password. 

Bitcoin is uniquely different to regular currencies because it doesn’t rely on banks or a big central organisation to control it. 

Instead, it uses a global network of computers called nodes that work together to process and store transactions. 

All the transactions are recorded using a technology called blockchain, which stops people from spending the same Bitcoin twice and makes it nearly impossible to change past transactions. 

Bitcoin is sometimes called “digital gold” because people use it as a way to save money, especially in countries where regular money isn’t very strong. 

But it’s never a safe bet: its value can go up and down a lot. If you’re interested in investing, consult the eToro Academy.

Elon Musk and cryptocurrency

Elon Musk, the world’s richest man, is a big fan of cryptocurrencies and holds great influence in the crypto tech world. 

After supporting Donald Trump during the 2024 election, Musk was chosen to lead a federal advisory group called Doge and is one of the leading figures in the new administration. 

Musk has a huge impact on crypto prices – whenever he comments on Bitcoin or other cryptocurrencies, prices can rise or fall quickly. 

A staunch supporter, Musk’s position is that cryptocurrencies can change the way money works and take power away from big banks and governments. 

Many people in the crypto community are excited about Elon Musk working with Trump because they think this partnership could lead to good things for the world of crypto. 

The eToro Academy: Crypto
(A beginner’s guide)

Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.