Summary The U.S. establishes a Strategic Bitcoin Reserve, positioning BTC as a national asset and enhancing its legitimacy, akin to gold reserves. The SBR leverages ~200,000 BTC, valued at $17.8 billion, emphasizing Bitcoin's role as a modern counterpart to traditional reserves. Global adoption by nations and institutions, favorable technical indicators, and a supportive macroeconomic backdrop collectively strengthen the BTC bull case. The SBR challenges the "tulip" narrative, forcing skeptics to reassess their positions as Bitcoin's scarcity value and price potentially increase. On March 6, 2025, President Trump signed an executive order establishing the United States Strategic Bitcoin Reserve ((SBR)) and a Digital Assets Stockpile, marking a historic milestone for Bitcoin ( BTC-USD ) and the broader crypto world. This move positions BTC as a national asset, akin to gold reserves held at Fort Knox. It is a historic shift in governmental perception of crypto. As of March 7, 2025, Bitcoin trades at around $89,000, and the SBR’s implications—combined with other favorable catalysts—present a compelling bullish case for investors. I have been stating for years that BTC is the next reserve asset , and it seems this prediction has finally and officially come true. I think now is also a great time to remember that Bitcoin has been called “tulips” for a very long time. I have used this term several times in my previous articles , but always to drive home the main point: the reality is every single person who still unironically holds this perspective needs to seriously ask themselves if they are, in fact, wrong. It is okay to be wrong. But the fastest way down the right path after realizing you’ve been on the wrong path is to turn around. Because BTC trades 24/7/365, you can easily turn around at any time, 24/7/365. The United States of America now has a Strategic Reserve for tulips. So, how about that? These must be some very special tulips indeed. Executive Order Details The SBR leverages approximately 200,000 BTC—valued at $17.8 billion based on current prices—previously seized by the U.S. government through criminal forfeitures. Rather than liquidating these holdings, the administration has opted to designate them as a “store of value,” with Treasury Secretary Bessent overseeing the reserve’s management. The White House has dubbed this initiative a “digital Fort Knox,” emphasizing Bitcoin’s role as a modern counterpart to traditional reserves. Furthermore, the executive order instructs the Commerce and Treasury Secretaries to explore “budget-neutral” mechanisms to acquire additional BTC. This means that the purchases should not cost the taxpayer additional money: the funds must be procured from budget savings in other areas. The Digital Assets Stockpile will hold other crypto assets, but take no active step to purchase them. This represents a clear delineation between Bitcoin and the hundreds of other crypto assets that have been created after Satoshi Nakamoto mined the Bitcoin genesis block on 3 January 2009. The US is clearly stating that there is BTC, and then there is everything else in crypto. Global Implications: A Chain Reaction Among Nations, Corporations, and Institutions Make no mistake that this policy carries profound implications. By recognizing Bitcoin as a strategic asset, the US—the world’s largest economy—lends unprecedented legitimacy to the asset. I don’t think this will be an isolated event. Trump’s decision could trigger a domino effect amongst nations. I see allied nations—such as the UK, Japan, and Germany— evaluating the potential for their own BTC reserves now that the US has greenlighted it. Similarly, geopolitical rivals like China and Russia, despite historical skepticism toward crypto, might reconsider their stances to counterbalance U.S. influence in this emerging asset class. This potential wave of sovereign adoption could significantly bolster BTC’s global demand and price trajectory. Beyond governments, the SBR enhances Bitcoin’s appeal to corporations and institutional investors. Companies like Strategy ( MSTR ), which have already embraced BTC on their balance sheets , will likely accelerate their allocations. Other businesses that were previously hesitant could initiate their allocations. Institutional adoption has been a key driver of BTC’s prior rallies, and the U.S. government’s endorsement provides a powerful catalyst for further inflows. The legitimization of BTC as a reserve asset reduces perceived risk, potentially unlocking billions in capital from pension funds, endowments, hedge funds, and sovereign wealth funds. Charts Analysis: Indicators Signal Upside From a technical perspective, Bitcoin’s price action supports a bullish outlook. As of 7 March, BTC has stabilized around $88,000 following a brief post-announcement dip (likely a typical “sell-the-news” reaction). The chart reveals strong support at $85,000, $81,000, and $79,000, with higher lows indicating sustained buying interest. Bitcoin remains within striking distance of its January 2025 all-time high of $109,000. Such a sudden +20% move is not abnormal at all for BTC. BTC (Coinbase) I have also discussed in detail a lead-lag relationship between BTC and gold, going back to 2018 , which signals that BTC could be ready for its next leg higher. The quick summary is that BTC lags gold by about 1-3 fiscal quarters and gold’s jump to a higher plateau months ago signal that BTC may be about to move. The SBR development could serve as a catalyst. The Market Value to Realized Value (MVRV) ratio further reinforces this optimism. MVRV looks on-chain at the last time Bitcoin UTXOs (which are the blockchain’s representations of individual chunks of Bitcoins locked by cryptographic scripts) have moved to establish a cost basis for them. High MVRV means that more UTXOs are in greater unrealized profit. In all BTC market cycle tops, the MVRV has surged to peaks. Currently, at median levels, MVRV indicates Bitcoin is neither overbought nor deeply undervalued, suggesting significant room for appreciation before reaching speculative peaks. Historically, upward MVRV trends from this range have coincided with substantial price increases, a pattern that aligns with the SBR’s positive momentum. These technical factors, combined with fundamental catalysts of increased demand, increase the odds of a BTC rally. MRVR (Coinglass) Additional Catalysts Bolstering the Bull Case The SBR is not the only driver of Bitcoin’s upside. Several macroeconomic and policy developments enhance its attractiveness. The Fed’s ongoing consideration of interest rate cuts continues to favor risk assets, including crypto. Additionally, Trump’s obviously crypto-friendly administration signals a supportive regulatory environment. Bitcoin’s intrinsic attributes – its capped supply of 21 million coins and decentralized nature – also gain prominence in this context. Amid persistent inflationary pressures and eroding trust in fiat currencies, BTC’s “digital gold” narrative resonates more strongly. The SBR amplifies this story, positioning Bitcoin as a hedge against economic instability and a beneficiary of shifting global capital flows. Tulips And Psychological Game Theory For over a decade, skeptics have likened Bitcoin to the Dutch tulip mania of the 17th century: a speculative bubble destined to collapse. Critics have repeatedly dismissed BTC as a Ponzi scheme or a fad lacking intrinsic value. Yet, BTC has defied these predictions, rising from pennies in 2010 to $89,000 today, with growing adoption by individuals, corporations, and now the most powerful government in the world. The SBR directly challenges the tulip narrative, but understanding investor psychology reveals why the “tulip” bias persists—and how it creates a game theory dilemma. Cognitive biases, such as confirmation bias, can be pretty nasty for the victim and pretty amusing to bystanders who understand. Investors who view Bitcoin as a bubble tend to interpret every price correction as evidence of an impending crash while dismissing countervailing evidence like institutional adoption or the legitimization impact of an SBR. Anchoring bias further entrenches this skepticism, as detractors fixate on Bitcoin’s volatile early years rather than its evolving fundamentals. This psychological rigidity blinds them to clear signals of Bitcoin’s maturation, from its resilience through multiple halving cycles to its integration into mainstream finance. A common critique, which I see on the news very often, is that Bitcoin is volatile and therefore unfit for investment. The problem with this view is that it is extremely volatile to the upside. Some people love to sound smart and use words like “volatility” and “variance” and “risk,” but they have little understanding of what the words really mean, and they also choose to ignore the crucial fact that there hasn't been a single asset which was an outperformer without being “volatile.” Close your eyes and imagine, for a moment, something that just goes up with 40% CAGR in a straight line. Got the picture? Okay, good. Now please come back to the real world! Fortunately, in the real world, the actual game theory is more fascinating than a straight line 40% CAGR asset. As nations, institutions, and savvy investors accumulate BTC, holdouts in the “tulips” camp risk being left behind. The longer skeptics cling to the tulip narrative, the greater the likelihood they’ll face a stark choice: buy BTC at significantly higher prices or continue to significantly underperform. Each new adopter—be it a government or a corporation or a fund or a person—increases Bitcoin’s scarcity value, given its fixed supply. The last mover in this game could pay a premium as prices climb into six figures and beyond. The SBR accelerates this dynamic, forcing doubters to reassess their positions. The game theory is only just starting. Risks While the bullish case for Bitcoin is compelling, several risks warrant attention. First, the SBR’s long-term success hinges on execution. If the administration fails to secure additional BTC or if political opposition—such as from crypto-skeptical lawmakers—delays implementation, the reserve’s impact could underwhelm. Regulatory uncertainty also looms; a shift in U.S. policy post-Trump, particularly under a less crypto-friendly administration, could erode confidence. I do believe that this political risk will be mitigated in the next 4 years, or at least until the midterms. Globally, the anticipated chain reaction among nations and institutions is not guaranteed. Some governments may opt for alternative digital assets or central bank digital currencies (CBDCs). Similarly, corporations could hesitate if market volatility spikes or if macroeconomic conditions—such as an unexpected recession—shift capital away from risk assets. Technically, while the charts are favorable, a failure to break resistance at $109,000 could trigger a pullback, testing support levels and shaking out weaker hands. The MVRV’s median position cuts both ways; a sudden sentiment shift could delay the expected upside or create more downside. Finally, the game theory dynamic assumes rational actors, but entrenched skeptics might double down on their biases, slowing adoption and prolonging volatility. Nothing is certain, but I think the odds are good. Conclusion I believe the establishment of a US SBR is a watershed moment for Bitcoin. While short-term volatility remains a possibility, the long-term implications are overwhelmingly positive. The potential for global adoption by nations and institutions, favorable technical indicators, and a supportive macroeconomic backdrop collectively strengthen the BTC bull case. For investors, the message is clear: these are some special tulips, and they may not even be tulips after all. The SBR is a foundational step toward mainstream acceptance, and its ripple effects could propel BTC to new heights. As the US stakes its claim in the digital asset race, BTC stands poised to benefit—and so do those who position themselves accordingly.
