Agency Turf War Stalls Trump's Strategic Bitcoin Reserve Plan
Treasury and Commerce are feuding over legal authority to run Trump's Bitcoin reserve, but BTC still climbed Monday despite the uncertainty.
A behind-the-scenes battle between the US Treasury and Commerce departments is blocking one of President Donald Trump's flagship crypto initiatives — the Strategic Bitcoin Reserve — as neither agency can agree on who holds the legal authority to manage it, Bloomberg reported Monday. Trump ordered the reserve's creation last year, envisioning it housed at Treasury and funded by Bitcoin seized through federal asset forfeitures, with room for future purchases. But legal doubts over whether Treasury can permanently hold a volatile digital asset prompted officials to consider shifting the operation to Commerce instead.
The Justice Department's Office of Legal Counsel is now working with both departments to chart a legally viable path forward. At the heart of the dispute is a structural question: whether indefinitely holding Bitcoin — an asset that has shed nearly half its value since its October peak — falls within any agency's existing statutory mandate. Until that question is answered, the reserve remains frozen in bureaucratic limbo.
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Despite the policy paralysis, Bitcoin climbed on Monday, a move traders and analysts read as a sign that markets are treating the reserve as a long-term structural story rather than an immediate catalyst. The rally was especially notable given that Michael Saylor's Strategy firm disclosed it had sold 3,588 Bitcoin between June 29 and July 5, a significant supply event that failed to derail upward momentum.
The stakes are real: the US government already holds more than $20 billion in Bitcoin across various agencies, making Washington one of the largest sovereign holders on the planet. How that stockpile is ultimately managed — and whether it grows — could meaningfully affect supply dynamics in a market where institutional positioning has become increasingly sensitive to government policy signals. Traders, for now, appear willing to look past the bureaucratic wrangling.
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