The U.S. government may have a maximum of 88,000 BTC available for its newly announced Strategic Bitcoin Reserve, according to Alex Thorn, head of research at Galaxy Research. Thorn’s analysis highlights a significant limitation on the reserve’s potential size, as only forfeited Bitcoin can be repurposed for this initiative.
Government Holdings and the Bitfinex Seizure
In a March 7 post on X, Thorn pointed out that while the U.S. government currently holds approximately 198,000 BTC, a significant portion—112,000 BTC—must be returned to Bitfinex following a previous seizure. This leaves a maximum of 88,000 BTC available for the reserve, representing just 43% of total government holdings.
“We think the current U.S. Bitcoin balance available for repurposing into a reserve is a max of 88K BTC,” Thorn noted. “That’s because of the ~198K BTC now held by the U.S. government, 112K BTC will be returned to Bitfinex.”
Thorn also emphasized the distinction between “seized” and “forfeited” Bitcoin, a difference that will become increasingly relevant as the Strategic Bitcoin Reserve takes shape.
No Cost to Taxpayers, But a Limited Reserve
According to White House AI and Crypto Czar David Sacks, the initial Bitcoin for the reserve is intended to come from seized digital assets, ensuring there are no additional costs to taxpayers. However, Thorn’s analysis suggests that only forfeited Bitcoin—rather than all seized holdings—can be used, significantly reducing the reserve’s potential size.
Bitcoin remains the dominant digital asset in the U.S. government’s portfolio, accounting for 97.7% of its total crypto holdings. When Wrapped Bitcoin (WBTC) is included, that figure rises to 98%.
Crypto Industry Applauds the Move
Former President Donald Trump’s decision to establish the Strategic Bitcoin Reserve has been met with widespread praise within the crypto community. Coinbase CEO Brian Armstrong called it a “historic moment for Bitcoin and crypto,” predicting that other G20 nations may follow the U.S. lead in adopting similar reserves.
Galaxy Digital’s head of research, Ryan Rasmussen, outlined the broader implications of the reserve, arguing that it could eliminate fears of large-scale government Bitcoin sales, bolster institutional adoption, and encourage participation from financial organizations, wealth managers, and even state governments.
“A U.S. Strategic Bitcoin Reserve means… other countries will buy Bitcoin, wealth managers have no excuse, financial institutions have no excuse, pensions/endowments have no excuse,” Rasmussen stated.
Regulatory Implications and Market Sentiment
Rasmussen further noted that the move could signal a shift in U.S. regulatory policy, making it less likely that stringent rules or bans on Bitcoin will be imposed. With the government actively holding Bitcoin, the idea of banning or heavily restricting it would be counterproductive.
The announcement comes at a crucial time for the market, with Bitcoin holding strong despite recent volatility. At the time of writing, Bitcoin was trading around $87,800. Additionally, the upcoming White House Crypto Summit on March 7 is expected to play a key role in shaping market sentiment, as lawmakers and industry leaders discuss Bitcoin’s role in the financial system.
As the U.S. moves toward formalizing its Strategic Bitcoin Reserve, industry experts will closely watch how other nations respond and whether this policy shift leads to increased global Bitcoin adoption.
