On March 7, 2025, crypto investor and Wolf of All Streets podcast host Scott Melker dedicated a significant portion of his Wolf Den newsletter to discussing the implications of the U.S. Strategic Bitcoin Reserve (SBR) launch. Later that day, he expanded on the topic via X (formerly Twitter), explaining the importance of the event and why the market reaction led to an unexpected price drop.
The U.S. Strategic Bitcoin Reserve Creation
The idea of a U.S. Bitcoin stockpile was first introduced by Donald Trump in 2024 at the Nashville Bitcoin Conference. Around the same time, Senator Cynthia Lummis proposed a bill advocating for the U.S. to acquire one million BTC over five years.
Many in the crypto community expected Trump to sign the Bitcoin Reserve creation order immediately after his inauguration in 2025. Instead, no mention of crypto was made in his inauguration speech—though he did pardon Ross Ulbricht, fulfilling a campaign promise. The official confirmation of the Bitcoin Reserve came later, with Sen. Lummis joining the Senate Banking Subcommittee on Digital Assets as chair.
On March 6, 2025, Trump signed an executive order establishing the Strategic Bitcoin Reserve, though its structure differed from Lummis’ original proposal. Rather than purchasing Bitcoin, the reserve consists solely of seized BTC from criminal forfeitures. This approach ensures the reserve grows without taxpayer funding, though alternative acquisition strategies may be explored.
“I have a few budget-neutral strategies for acquiring additional bitcoin…” — Michael Saylor (@saylor), March 7, 2025
Currently, the U.S. government holds approximately 200,000 BTC, though an audit is underway to determine the exact amount. The executive order also established a Digital Assets Stockpile, which includes ETH, ADA, SOL, and XRP. However, some have raised concerns about potential conflicts of interest, alleging that White House crypto czar David Sacks could indirectly profit from the initiative—an accusation Sacks has denied.
The Price Drop Explained
The launch of the Strategic Bitcoin Reserve initially triggered optimism within the crypto community, but Bitcoin’s price unexpectedly dropped by $5,000 following the announcement. Many had anticipated that the reserve creation would act as a bullish catalyst, leading to large BTC purchases.
Scott Melker believes the market downturn stemmed from misplaced expectations:
“Most people who claim to be in Bitcoin for the fundamentals really just care about number go up. The U.S. locking up BTC as a store of value is massive long-term validation—but because it’s not an instant pump, traders overreact.” — Scott Melker (@scottmelker), March 7, 2025
Melker emphasized that while the U.S. isn’t currently buying Bitcoin, the fact that it recognizes BTC as a strategic asset is significant. He argues that other countries will likely follow suit, setting the stage for a global Bitcoin race—a long-term bullish signal.
Furthermore, Melker pointed out that Bitcoin’s price action followed a common pattern in illiquid markets:
“When big news drops into an illiquid market, leverage flushes out weak hands. Then, the bigger investors step in and move the price up.”
As expected, Bitcoin rebounded shortly after the initial drop, reinforcing Melker’s view that the SBR launch will create upward price pressure in the long run.
Diverse Reactions Across the Crypto Community
The unveiling of the Strategic Bitcoin Reserve sparked mixed reactions. Some were disappointed that the U.S. government wasn’t actively purchasing BTC, while others saw little difference between the Department of Justice holding seized Bitcoin and the U.S. Treasury managing the SBR.
Melker pushed back against the criticism, reminding skeptics that the executive order doesn’t preclude future BTC acquisitions:
“If you think the Bitcoin SBR is bad news because it will only contain seized bitcoin, then you are bad at reading and worse at comprehending what you are reading. Sell me your Bitcoin.” — Scott Melker (@scottmelker), March 7, 2025
Meanwhile, Bitwise Invest’s Jeff Park dismissed the order, calling it a pump-and-dump distraction:
“I’m honestly just glad we can get this pump-and-dump chapter finally over with and move on to the things that actually matter: tax policies, 10-year interest rates, and Bitcoin-backed stablecoins.” — Jeff Park (@dgt10011), March 7, 2025
Despite the skepticism, many Bitcoin bulls praised the executive order. Senator Cynthia Lummis expressed full support, though she noted Congress’s lack of involvement in the decision:
“This is only the ₿eginning.” — Senator Cynthia Lummis (@SenLummis), March 7, 2025
Additionally, Bitcoin Therapist, a well-known BTC supporter, called the announcement “the most bullish news in four years”:
“GM. THE UNITED STATES IS GOING TO BUY BITCOIN. THIS IS A FACT. READ THE FINE PRINT. ANYONE WHO SAYS DIFFERENTLY IS BEING DISINGENUOUS. THIS IS THE MOST BULLISH NEWS I’VE SEEN IN PAST 4 YEARS. THE ENTIRE WORLD IS NOW ON HIGH ALERT. BITCOIN TREASURIES ARE COMING.” — Bitcoin Therapist (@TheBTCTherapist), March 7, 2025
A Long-Term Bullish Development
While Bitcoin’s immediate price drop surprised many, Scott Melker and other analysts argue that the Strategic Bitcoin Reserve is a long-term positive for BTC. The U.S. government’s recognition of Bitcoin as a strategic asset paves the way for broader institutional adoption and may trigger a global Bitcoin reserve race.
As the U.S. audits its Bitcoin holdings and explores budget-neutral acquisition strategies, it remains to be seen whether the Strategic Bitcoin Reserve will evolve into a direct investment strategy. In the meantime, the crypto industry will closely monitor how other nations respond—and whether they too will begin accumulating Bitcoin as a strategic reserve asset.
