The Daily: Trump orders Strategic Bitcoin Reserve akin to 'digital Fort Knox,' Ripple co-founder's XRP loss tied to LastPass hack and more

The following article is adapted from The Block’s newsletter,  The Daily , which comes out on weekday afternoons.

It's Friday! So Trump signed an executive order late Thursday to establish a U.S. Strategic Bitcoin Reserve and Digital Asset Stockpile, but all eyes now turn to the inaugural White House Crypto Summit later today as the industry awaits further details.

In today's newsletter, bitcoin deposited into the reserve will be held as a store of value akin to a "digital Fort Knox," Standard Chartered says funding it could involve selling gold, Coinbase executive Conor Grogan says the order could remove about $18 billion of sell-side pressure and more.

Meanwhile, Trump's bitcoin reserve plan was hailed as a "huge moment" by some but dismissed as a "pig in lipstick" by others.

Let's get started.

President Trump signs order to establish Strategic Bitcoin Reserve

Late Thursday, President Trump signed an executive order to establish a U.S. Strategic Bitcoin Reserve , capitalized by the approximate 200,000 BTC ($18 billion) already owned by the federal government, forfeited as part of criminal or civil proceedings.

• The executive order mandated a full accounting of the federal government's holdings, and the U.S. will not sell any bitcoin deposited into the reserve, which will be kept as a store of value akin to a "digital Fort Knox," White House crypto czar David Sacks said.
• Trump also directed Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick to develop budget-neutral strategies for acquiring additional bitcoin, provided that those strategies have no incremental costs to American taxpayers. 
• The executive order also establishes a U.S. Digital Asset Stockpile consisting of cryptocurrencies other than bitcoin. However, the government will not acquire additional assets for the stockpile beyond those obtained through forfeiture proceedings.
• The words "reserve" and "stockpile" have been used interchangeably over the past few months, sparking some confusion.
• Last Sunday, President Trump had announced plans to move forward with a "Crypto Strategic Reserve" that included XRP, SOL and ADA alongside BTC and ETH.
• On Friday, Sacks explained that Trump simply named the top five cryptocurrencies by market cap, suggesting "people are reading into this a little bit too much."

Standard Chartered says bitcoin reserve funding could involve selling gold

Standard Chartered Global Head of Digital Assets Research Geoff Kendrick suggested one option for funding the U.S. Strategic Bitcoin Reserve in a budget-neutral way would be to sell part of its $760 billion gold reserves .

Other options include using the U.S. Treasury's Exchange Stabilization Fund's $39 billion or passing the Bitcoin Act 2024, introduced by Sen. Cynthia Lummis, which proposes buying 200,000 BTC annually for five years, Kendrick said.

However, he cautioned that immediate policy implementations are unlikely, noting that Treasury Secretary Scott Bessent will play a critical role in shaping and executing the acquisition strategy.

"In reality, I cannot see any of these three solutions being delivered today," Kendrick said.

Coinbase exec says Trump's bitcoin reserve could remove $18 billion of sell-side pressure

Coinbase executive Conor Grogan said President Trump's Strategic Bitcoin Reserve could remove substantial sell pressure from the market , referring to the value of the United States' seized holdings.

• Under federal asset forfeiture laws, the government was obliged to sell the seized bitcoin eventually, and that is no longer the case, economist and trader Alex Krüger explained.
• "By my estimation, the [U.S. government] owns 198,109 BTC. This executive order removes around $18 billion of sell-side pressure," Grogan posted on X.
• Arkham Intelligence data shows that the U.S. government also holds about 122 million USDT and 56,035 ETH ($121 million), among other cryptocurrencies.

Elizabeth Warren requests immediate public disclosures from crypto czar David Sacks

Writing to David Sacks on Thursday following President Trump's Strategic Bitcoin Reserve executive order, long-time crypto critic Sen. Elizabeth Warren demanded immediate public disclosures from the crypto czar , citing concerns over conflicts of interest.

• Warren also asked Sacks how he would "prevent the President and other private individuals from directly profiting off of the Trump administration's efforts to selectively pump the value of certain crypto assets, drop crypto asset-related enforcement actions and deregulate the crypto asset industry."
• "These actions have the potential to benefit billionaire investors, Trump administration insiders and speculators at the expense of middle-class families," Warren alleged.
• On Monday, Sacks stated he sold all his crypto-related holdings, including BTC, ETH, SOL and his stake in Multicoin Capital, before Trump took office and is currently undergoing an official ethics review.

Ripple co-founder's multi-million XRP loss tied to LastPass hack

The cause of Ripple co-founder Chris Larsen's approximate 283 million XRP ($150 million) loss in January 2024 was storing his private keys in LastPass , according to onchain sleuth ZachXBT, citing a court filing.

• "Up to this point Chris Larsen had not publicly disclosed the cause of the theft," Zach said on Friday, with the Ripple co-founder only admitting last year that there had been "unauthorized access" to his "personal XRP accounts."
• The LastPass security breach dates back to 2022, when attackers hacked the password manager and succeeded in stealing vast amounts of data, including customer keys, API tokens and MFA seeds.

Looking ahead to next week

• U.S. CPI inflation data are released on Wednesday. U.S. jobless claims and PPI figures follow on Thursday. UK GDP numbers are out on Friday.
• ECB President Christine Lagarde will speak on Wednesday.
• Movement, EigenLayer, Ethena, Aptos, Axie Infinity and Moca Network are all set for token unlocks.

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