Trump Seeks Bitcoin Reserve Buys Amid Legal and Custody Hurdles

By Tom Whitfield

Donald Trump’s March 2025 executive order established the U.S. Strategic Bitcoin Reserve, but the administration has announced no program for direct Bitcoin purchases. Former White House crypto adviser Patrick Witt, who led the White House crypto council until October, said Trump remains interested in acquiring more.

In a What Bitcoin Did interview published November 9 and recorded before the November 3 midterm elections, Witt said: “I can tell you the president’s interested in it. I can tell you that there has been a lot of discussion about how we might be able to do that.” His comments describe political intent without a settled funding, custody or statutory mechanism.

Can the government buy Bitcoin legally?

The executive order directed the Treasury Department and Commerce Department to develop acquisition strategies without increasing federal spending. The reserve was initially funded with Bitcoin obtained through completed federal forfeiture proceedings, and agencies must identify assets they can legally transfer.

Witt said existing law does not clearly authorize outright open-market purchases: “It’s of questionable legality whether or not there could be outright open market purchases.” Without clearer authority, Congress could add language to the National Defense Authorization Act prohibiting federal Bitcoin purchases, creating the political backlash the administration sought to avoid.

Where would the funding come from?

Treasury has considered several routes that officials framed as avoiding new taxpayer costs:

• Revalue federal gold holdings by updating the accounting value of gold certificates held at a statutory price far below market value. Existing law does not automatically allow that accounting adjustment to finance Bitcoin purchases.
• Use the Treasury’s Exchange Stabilization Fund.
• Convert government-held digital assets into Bitcoin.
• Accept BTC for specified tax and fee payments.

Treasury Secretary Scott Bessent would decide which legally permitted route, if any, the department takes. In August, Trump confirmed discussions about additional purchases but announced neither a decision nor a timetable.

What legislation could authorize purchases?

Senator Cynthia Lummis supports legislation allowing the government to accumulate as many as 1 million BTC over five years. A separate House proposal from Representative Nick Begich would direct Treasury to study budget-neutral acquisitions without a fixed purchase target. It would require eligible Bitcoin to remain in the reserve for at least 20 years, subject to specified exceptions.

The November 3 elections gave Democrats control of both chambers, increasing the difficulty of passing legislation that supports federal purchases. Witt said permanent establishment of the reserve would be difficult and could require attaching reserve provisions to a larger bill rather than relying on standalone legislation. Without new legislation, however, the reserve continues under an executive order that another president could amend or revoke.

Can federal agencies custody the reserve?

Witt said federal agencies have kept inconsistent records of seized cryptocurrency, making a reliable cross-department accounting of Bitcoin difficult. Some agencies reportedly stored cold wallets in desk drawers, while others relied on outside custody providers, raising wallet-security concerns.

He raised the same concerns during a May appearance at Consensus and cited a U.S. Marshals Service investigation into a suspected theft of more than $60 million in cryptocurrency from government-linked wallets. Government custody drew further scrutiny after October transfers to Coinbase Prime involving hundreds of Bitcoin. The Marshals Service selected Coinbase Prime in 2024 to provide custody and advanced trading services for assets handled through federal forfeiture operations.

What happened to Trump Media’s Bitcoin?

Trump Media & Technology Group separately transferred 4,259 BTC to Crypto.com from wallets associated with convertible-note collateral on November 5. The transfers were valued at approximately $343.7 million, although the company has not publicly confirmed that they involved Bitcoin sales.

Trump Media subsequently reported holding approximately 15,649 BTC as of September 30, after purchasing 4,359 Bitcoin during the third quarter. The company’s transactions do not indicate a federal reserve purchase.

With no purchase timetable and no clear direct-buying authority, the next structural test is a Treasury decision using a legally permitted funding route. Any move to replace executive authority with statute would require congressional action, making divided control the immediate obstacle.