According to Alex Thorn, director of research at Galaxy Research, the US government could potentially be able to use up to 88,000 BTC for its newly announced strategic Bitcoin reserve.
In a March 7 post on X, Thorn said the government currently owns around 198,000 bitcoin (BTC), but needs to return 112,000 BTC to Bitfinex after a previous attack. This means that only a portion of the property up to 88,000 BTC can be used for the reserve.
According to White House AI and Crypto Czar David Sacks, the reserve's first Bitcoin comes from seized digital assets and is set to not secure additional costs for taxpayers. However, Thorn's analysis suggests that Bitcoin, not only has been confiscated but can be reused, significantly reducing the potential size of the reserve.
Thorn also noted that Bitcoin accounts for 97.7% of the government's digital assets, and that percentage increases to 98% when wrapped Bitcoin (WBTC) is taken into account.
Trump's decision to establish a reserve has been widely praised in the crypto space. Coinbase CEO Brian Armstrong calls it “a historic moment for Bitcoin and crypto,” predicting that other G20 countries could attract attention and potentially track down the US lead.
Ryan Rasmussen, director of research at Galaxy Digital, outlined the broader implications of strategic Bitcoin reserves, arguing that the US government is selling large quantities of Bitcoin and removing fears of strengthening lawsuits for institutional adoption.
The changes to regulations would encourage more countries, asset managers, financial organisations and even state governments to buy Bitcoin, he said.
According to Rasmussen, the ruling also reduces the possibility that the US will impose strict rules on Bitcoin. It is ineffective to ban or regulate Bitcoin because it is actively owned by the government. As a result, industry experts believe that this policy change will fundamentally change the Bitcoin narrative.
Bitcoin continues to hold a strong position despite recent market turbulence, trading at around $87,800 at the time of the press. The March 7 White House Script Summit, where lawmakers and executives are expected to discuss the role of Bitcoin in the financial system, is expected to shape market sentiment.
