Trump’s Bitcoin Reserve Stalls Over Control of $21.1B in Seized BTC

Bitcoin News

The Trump administration’s plan to build a Strategic Bitcoin Reserve has stalled as two federal agencies fight over control of the government’s seized Bitcoin (BTC). People familiar with the matter say the Treasury and Commerce departments are at odds over how the reserve should be structured and which should hold primary oversight, freezing momentum on one of President Trump’s signature digital-asset policies. The White House confirmed the framework is still being worked out. Spokesperson Liz Huston said the administration continues to evaluate the best structure for the reserve and the accompanying US Digital Asset Stockpile, signalling that the initiative is delayed rather than abandoned as departments negotiate.

At the heart of the standoff is a legal question — whether the Treasury holds clear statutory authority to keep Bitcoin, a highly volatile asset, as a federal reserve holding. That uncertainty has pushed the Commerce Department forward as an alternative custodian. The Justice Department’s Office of Legal Counsel, the unit that advises the executive branch on how laws should be interpreted, is reportedly working with both departments to map out a lawful structure. Custody arrangements, independent audits and the eventual role of Congress all remain unresolved, keeping the reserve alive on paper but well short of an operational, funded program.

The reserve traces back to Trump’s March 2025 executive order, which directed the Treasury secretary to establish a dedicated office to manage the holdings. That order specified the reserve would hold Bitcoin forfeited through criminal and civil proceedings, including coins already controlled by federal agencies. Critically, it instructed that government Bitcoin placed in the reserve should not be sold but retained as a long-term reserve asset. The same order, however, required Treasury to review legal and investment questions — including where the accounts should sit and whether fresh legislation was needed — a review that has now surfaced the very impasse blocking progress today.

On-chain data shows the US government currently controls roughly 328,372 Bitcoin, worth about $21.1 billion at present prices — making it the largest nation-state holder of the asset. Those coins were accumulated largely through court-ordered seizures over several years, though Washington has periodically sold portions during that period, at times well below Bitcoin’s all-time high. The White House has argued that earlier disposals cost taxpayers more than $17 billion in forgone gains, framing consolidated long-term custody as a strategic advantage. That reasoning underpins the administration’s insistence that the holdings be centralized under one office rather than scattered across agencies.

Lawmakers are separately working to lock the reserve into statute. Two bills introduced in May — the BITCOIN Act and the ARMA Act — would direct the government to acquire up to one million Bitcoin over five years using budget-neutral strategies, meaning purchases funded without adding to the deficit. Codifying the reserve in law would shield it from reversal by a future administration, a concern for advocates who note the entire framework currently rests on a single executive order. Passage, however, remains uncertain: neither bill has cleared committee, and the interagency dispute over custody could complicate the legislative path further.

White House crypto adviser Patrick Witt has described the ARMA Act as a version 2 of the earlier BITCOIN Act, saying officials spent considerable time examining the legal implications of standing up a reserve. Under ARMA, acquired Bitcoin would have to be held for at least 20 years unless sold to reduce the national debt, which is approaching $40 trillion. Supporters argue a codified, long-horizon reserve could strengthen Bitcoin’s case as a sovereign treasury asset — distinct from the altcoin experiments of earlier cycles — and blunt the death-spiral fears that shadowed leveraged holders through the last bear market.

Beyond the policy noise, COINOTAG’s proprietary 42-indicator composite S/R scoring engine rates the $63,820 resistance at 76/100, driven by the confluence of the Fibo 0.236 retracement, the R1 pivot and a high-volume node, while the $61,887 support scores 73/100 on the SMA 20 and Ichimoku cloud base. With spot near $62,930, RSI at 48.5 and a downtrend intact, price sits pinned between the two. Derivatives data shows a mildly positive 0.0048% funding rate, $12.35 billion in open interest and a 1.59 long/short ratio (61% long) — cautious optimism. A Fear & Greed reading of 27 marks entrenched fear. A daily close above $63,820 opens $67,369; losing $61,887 invalidates the bullish setup.