US Bitcoin reserve marks ‘real step’ toward global financial integration

President Donald Trump signed an executive order creating a Strategic Bitcoin Reserve and a Digital Asset Stockpile, marking the first major step toward integrating Bitcoin into the US financial system.

Trump’s executive order outlined a plan to initially use cryptocurrency forfeited in government criminal cases, Cointelegraph reported on March 7.

As one of the crypto industry’s most widely-anticipated moves, the Strategic Bitcoin (BTC) Reserve marks the first “real step” for Bitcoin’s integration into the global financial system, according to Joe Burnett, head of market research at Unchained.

“The Bitcoin integration era has begun,” Brunett told Cointelegraph, adding:

“Now, with the establishment of a Bitcoin Strategic Reserve, the US has taken its first real step toward integrating Bitcoin into the fabric of global finance, acknowledging its role as a foundational asset for a more stable and sound monetary system.”

Despite the historic executive order, Bitcoin plunged over 6% after the announcement, falling from $90,400 to $84,979. Many investors had anticipated the government would announce a plan to purchase additional Bitcoin, leading to short-term disappointment.

Despite the disappointment, the executive order marked a significant pivot that confirmed Bitcoin is “no longer an outsider” among the global financial assets, Burnett said.

“As the seventh-most valuable asset on earth, it is now positioned alongside traditional reserves, signaling a shift in how governments and institutions approach financial security, inflation protection and global liquidity,” he added.

The crypto industry will be watching Trump’s upcoming White House Crypto Summit on March 7, where more details on the Bitcoin reserve and digital asset stockpile plans are expected.

Trump’s Bitcoin reserve may bring new financial products

The establishment of a Bitcoin reserve may lead to the creation of new Bitcoin-backed financial products, including lending mechanisms and alternative settlement solutions, Burnett said:

“Expect to see new financial products designed around Bitcoin, from reserve-backed lending mechanisms to cross-border settlements that bypass outdated systems.”

“What happens next will define the integration era. Some will embrace it and lead, others will hesitate and risk falling behind. History will remember the difference,” he added.

Developers in the crypto space have already been working on financial solutions through Bitcoin-based decentralized finance (DeFi), also known as BTCFi. This emerging sector aims to bring DeFi capabilities to Bitcoin’s blockchain.

BTCFi applications saw a breakout year in 2024 after the April halving, with the industry’s value experiencing a 22-fold increase driven by infrastructure development and soaring Bitcoin prices.

*Bitcoin TVL, 2024 chart. Source: DefiLlama*

The total value locked (TVL) in the Bitcoin network saw more than a 2,000% increase during 2024, from $307 million in January to $6.5 billion on Dec. 31, DefiLlama data shows.

The “breakout year” was mainly attributed to growing developments around Bitcoin staking and restaking platform Babylon, which controls over 80% of TVL in BTCFi, Binance Research told Cointelegraph.

Babylon was seen as a significant opportunity for Bitcoin-based DeFi, thanks to introducing Bitcoin-native staking for the first time in crypto history.