On January 8, 2026, U.S. Treasury Secretary Scott Bessent announced that Bitcoin not received during law enforcement actions will be included in the national "strategic reserves," and will no longer be disposed of through regular judicial auctions as in the past. He also reiterated that the Treasury will not actively purchase Bitcoin in the open market. This dual stance of "only in, not out; only collect, not buy" ties law enforcement asset management to national reserve strategy, sending a clear signal that is markedly different from the past. For an asset with a constant total supply and a highly marketized circulation, when the largest sovereign nation begins to store confiscated chips in the treasury rather than liquidating them, it not only means that the supply-side structure of Bitcoin is being rewritten, but also quietly transforms the traditional boundaries of "national assets" and "strategic reserves."
A Major Turn from Judicial Auctions to National Treasury
Before this policy adjustment, the U.S. government's practice for handling confiscated Bitcoin was led by the Department of Justice and the U.S. Marshals Service, which concentrated the chips and sold them through public auctions, with the proceeds counted as fiscal revenue. This path continued the traditional approach of "liquidating confiscated assets": whether from drug cases, hacking cases, or large fraud cases, most confiscated Bitcoin would ultimately be cleared in one go at auction, allowing the market to take over. Over the past decade, multiple rounds of large-scale auctions have been well-known in the industry and were even once regarded as synonymous with "national-level selling pressure events."
However, after January 8, 2026, the Treasury clearly stated that these chips will be included in the "strategic reserves," meaning they will no longer be routinely auctioned off but will instead transition into a holding state with a longer time dimension and lower liquidity. Many observers view this as a historic reversal in the disposal path: the same law enforcement confiscated assets are now being treated as "passive holders" rather than "active sellers," indicating that the government is no longer solely focused on maximizing short-term fiscal revenue but is viewing Bitcoin as a long-term asset resource. In the context of U.S. domestic politics and fiscal conditions, this shift can easily be packaged as an "asset management upgrade"—that is, under the backdrop of fiscal pressure and expanding deficits, not hastily liquidating potential appreciating assets but rather optimizing the balance sheet structure to reserve flexible space for future uncertain risks.
After the ETF Absorbs $56 Billion…
Since the approval of the spot Bitcoin ETF, the funding structure has undergone profound changes. According to Matrixport data, net inflows into Bitcoin ETFs were approximately $34 billion in 2024, and continued inflows of about $22 billion in 2025, totaling around $56 billion of funds allocated through compliant channels over two years. This means a considerable amount of chips has been locked into the ETF product structure, transforming into assets held long-term by institutions rather than chips that frequently circulate in the secondary market.
In this context, the U.S. government's transition of confiscated Bitcoin to "strategic reserves" for long-term holding, combined with the scaled holdings of ETFs, effectively withdraws freely circulating spot supply from two dimensions. On one hand, ETFs, primarily driven by passive tracking and institutional allocation, tend to view Bitcoin as a medium- to long-term asset allocation tool; on the other hand, the government has shifted from being a seller to a holder, causing chips originally intended for auction clearance to settle in the sovereign asset pool. This dual locking effect will squeeze the "live water" that can be frequently traded in the secondary market.
As this process overlaps with Bitcoin's halving cycle and the increased allocation demands from various institutions under asset diversification pressure, the market's liquidity logic is being reshaped layer by layer. Halving means a decline in marginal new supply, while ETFs and government reserves withdraw chips from the existing stock, making it easier for prices to experience sharp increases driven by shortages during upward phases, while also making liquidity more fragile and volatility more intense when macro and regulatory expectations are disturbed. Investors need to adapt to a new normal of "larger nominal market value, but tighter tradable chips."
Government Becomes a Passive Long-Term Holder: Supply Structure Quietly Changes
In market interpretations, the comment "this will change the market supply structure of Bitcoin" has been frequently cited. In the past, the U.S. government played a more periodic seller role in the Bitcoin market: when cases accumulated to a certain scale, it would release chips to the market all at once through auctions, creating short-term predictable selling pressure. However, under the "strategic reserves" framework, the government has transformed from a periodic seller to a special type of long-term holder, whose behavior model differs from traditional hedge funds or long-term institutions, yet still leaves a profound mark on the supply curve.
It is noteworthy that while emphasizing the "inclusion in strategic reserves," the Treasury has repeatedly reiterated that it will not actively purchase Bitcoin in the open market, deliberately separating itself from "directly going long." This distinction is not merely a semantic detail but a form of posture management in the political and regulatory context: on one hand, it acknowledges Bitcoin's asset attributes and potential value, upgrading confiscated chips from "quick liquidation" to "strategic resources that can be retained"; on the other hand, it avoids being labeled as "officially speculating on Bitcoin" or "government speculation," to prevent triggering congressional scrutiny and public controversy. Therefore, the passive holdings formed from law enforcement confiscations differ fundamentally in political meaning and market signals from actively constructed investment positions.
In terms of pricing, the market tends to view such government holdings as a "special stock with extremely low selling pressure," rather than chips that can be priced on the order book daily. As long as there are no extreme fiscal or security events triggered, Bitcoin under the name of "strategic reserves" resembles assets stored in a regulatory refrigerator rather than high-frequency circulating inventory. Over time, a growing "non-movable" denominator will appear in holding statistics, amplifying the price elasticity of remaining tradable chips when facing equivalent demand.
The Narrative of Strategic Reserves Spills Over: Will Other Countries Follow Suit?
The Treasury Secretary's statement is not only an internal asset management adjustment but may also become a starting point for global policy narratives. Voices within the industry have pointed out that "the concept of strategic reserves may trigger imitation by other countries." In the reality of intensified geopolitical competition and frequent use of financial sanctions, when the U.S. takes the lead in incorporating Bitcoin under the label of "strategic reserves" in official discourse, other sovereign nations are unlikely to remain completely indifferent. Even if they do not publicly follow suit in the short term, internal discussions around "whether to hold a certain amount of Bitcoin to hedge against risks in the dollar system" are likely to quietly unfold within the security and fiscal departments of different governments.
From the perspective of asset attributes, the topic of Bitcoin being included in national strategic reserves will naturally be compared with traditional reserve assets like oil and gold. Oil is more tied to energy security and industrial systems, while gold serves as a long-term value anchor and monetary credit buffer. If Bitcoin enters the "national security asset framework," its symbolic significance outweighs short-term utilitarian gains. It represents a hedging allocation against decentralized value carriers, signaling "national-level recognition of its place in the global financial system," serving as a structural complement to traditional reserve systems.
Different types of economies may carve out their own paths in response to sanction risks and pressures for diversifying foreign exchange reserves. Developed economies, with a stronger domestic currency credit base and deeper financial markets, are more likely to indirectly absorb Bitcoin risks through regulatory clarity and financial products like ETFs, while maintaining restraint on official balance sheets, only considering reserve treatment of confiscated chips in special circumstances. Resource-rich countries or economies heavily affected by sanctions may view Bitcoin earlier as a potential tool to bypass traditional clearing systems, shifting a small portion of reserves to high-volatility but decentralized assets to hedge against extreme scenarios. This differentiated response, combined with the U.S. "strategic reserves" rhetoric, will reshape the sovereign holding landscape of Bitcoin over a longer time dimension.
Legal Gray Areas and Transparency Dilemmas: The Market Can Only "Guess and Follow"
Although the term "strategic reserves" carries significant weight, the legal and institutional foundation surrounding this designation remains vague. Currently, there is a lack of specific legal provisions regarding Bitcoin to clarify its formal status as a national strategic reserve asset, and no publicly transparent entity has been authorized to manage this portion of chips long-term. It is more a state of policy rhetoric leading, with legal and institutional arrangements lagging behind; the Treasury's statement leaves room for subsequent legislation and administrative details, but it is unlikely to provide complete clarity at the operational level in the short term.
In such an information environment, discussions about the reserve quantity and specific management mechanisms must be approached with high restraint. Claims circulating in the market, such as "the government holds about 200,000 Bitcoins," currently remain unverified rumors without confirmation from authoritative channels; similarly, discussions about whether to establish a specialized "strategic reserve entity" to manage these chips also remain at the level of speculation. Whether regarding specific reserve scales or details of potential future administrative orders, these cannot be regarded as established facts, nor should they be amplified to avoid creating unnecessary misguidance in market sentiment.
In the absence of complete statistics and unified rhetoric, the market can only seek a balance between on-chain tracking and official sporadic disclosures. On one hand, on-chain data analysis companies will continue to monitor address changes associated with the U.S. government, attempting to estimate the current quantity of confiscated Bitcoin in a "non-circulating" state; on the other hand, fragments of information occasionally disclosed by institutions like the Treasury and the Department of Justice in annual reports or special hearings will become important bases for analysts to adjust their models. The result is a dynamic expectation of "guessing and following": the reserve scale is opaque, but the direction is locked in "more chips remain in the treasury rather than at auction," which itself is sufficient to influence supply-demand structure and risk premiums in the medium to long term.
From a Policy Adjustment to a National-Level Asset Narrative Turning Point
If we extend the timeline, the U.S. transition from "auctioning confiscated Bitcoin" to "putting it into the treasury" is essentially part of the same structural reorganization as the process of ETF expansion and institutional entry over the past two years. The auction mechanism once dispersed the chips in the government's hands to market participants, while the logic of ETFs and strategic reserves is concentrating the chips back into the hands of a few large asset managers and sovereign entities. The distribution of chips is moving from fragmentation to concentration, and the power dynamics are shifting from early geeks and retail investors to a joint game between institutions and the state.
Key observations moving forward include whether the actual scale of confiscations in the U.S. will significantly increase due to changes in law enforcement and regulatory environments, thereby continuously expanding the strategic reserve pool; to what extent other countries will respond through policy statements or implicit actions, especially those economies in competitive relations with the U.S.; and whether the U.S. will gradually promote a more formal reserve framework, from legal status and accounting classifications to management mechanisms, providing a clear institutional home for this portion of Bitcoin. These variables will determine whether "strategic reserves" remains a symbolic label or evolves into a long-term institutional arrangement similar to gold reserves.
From a broader perspective, Bitcoin is moving from being a regulated object to the brink of being included in the national policy toolbox. It remains a key focus of financial regulation in various countries, linked to anti-money laundering, sanctions enforcement, and financial stability; on the other hand, it is beginning to embed itself into existing financial and policy systems through multiple identities such as ETFs, institutional asset allocation, and sovereign reserves. Whether the path is smooth and the pace fast or slow is filled with uncertainty, but the directional shift has become difficult to reverse: when the U.S. Treasury begins to think about "how to better hold" rather than "how to quickly sell" Bitcoin, the relationship between this asset and sovereignty has already crossed a new threshold.
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