What You Need to Know About the Latest Executive Order

• President Trump signed an executive order to create a strategic reserve of bitcoin and other digital assets.
• The U.S. government’s stockpile of around 200,000 bitcoin, valued at approximately $17 billion, will comprise the reserve.
• Some cryptocurrencies experienced a brief price spike following Trump’s endorsement, but their values have since fallen.

President Trump signed an executive order to officially enter the United States into the cryptocurrency arena.

On Thursday, Trump enacted an order to establish a strategic bitcoin reserve and a digital asset stockpile. This reserve and stockpile will be composed of assets seized by the U.S. Department of the Treasury during court proceedings or paid as civil penalties to executive agencies.

David Sacks, the White House czar for cryptocurrency, stated that the United States holds approximately 200,000 bitcoin, equivalent to about $17 billion U.S. dollars.

Here’s an overview of what the executive order entails and what we can anticipate from the future of crypto.

Why did Trump sign an executive order for the bitcoin reserve?

The order aims to “establish a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile, positioning the United States as a leader among nations in government digital asset strategy.”

The order introduces two divisions to oversee the nation’s cryptocurrency reserves. The Strategic Bitcoin Reserve will treat bitcoin as a reserve asset, while the U.S. Digital Asset Stockpile will manage all digital assets beyond bitcoin.

This initiative aims to maintain the United States’ leading status in the cryptocurrency market. Senator Cynthia Lummis, R-Wyo, has introduced legislation to establish a bitcoin reserve, suggesting it could contribute to reducing the national debt and enhancing the U.S. dollar.

Did cryptocurrency prices increase after Trump signed the executive order?

Following Trump’s social media post on Sunday mentioning five cryptocurrencies he supports for inclusion in the stockpile, their values saw a temporary increase within hours. The cryptocurrencies identified were XRP, Solana, Cardano, Bitcoin, and Ethereum.

However, the prices of all five currencies have subsequently decreased by between 7% and 23% over the last five days.

What is cryptocurrency?

Cryptocurrency, often referred to as crypto, is a digital currency designed for use as an alternative payment method or a speculative investment, as per NerdWallet. The absence of a central government or bank enhances its appeal.

Individuals invest in cryptocurrencies similar to how they do in the stock market, with the expectation that increasing values will lead to profits. The market’s expansion has led to thousands of cryptocurrencies emerging, each with distinct functionalities, contributing to the overall growth of the crypto ecosystem.

While investors seek to gain from appreciating values, cryptocurrencies operate differently than stocks. In finance, stocks are considered securities because they represent value and can be traded. Conversely, cryptocurrencies inherently assign their own value, resulting in limited market interchangeability.

USA TODAY contributed to this report.