Bitcoin reserve cut in half as US holdings fall to $21B—can’t sell
Bitcoin’s Strategic Bitcoin Reserve has lost nearly $20B since October, with US holdings now about $20.8B (down from $40.7B). The drop is not from selling. By an executive order, the US government cannot liquidate a roughly 328,000 BTC reserve.
The stash grew after a major Department of Justice seizure in October 2025 of 127,271 BTC (about $14B at the time). Earlier, forfeited coins from law-enforcement actions were managed with less clarity, but the March 6, 2025 executive order formalized these assets as long-term strategic holdings.
A proposed American Reserve Modernization Act of 2026 would add audit requirements while explicitly prohibiting additional Bitcoin purchases, aiming to codify the “hold what you seize, don’t buy more” approach and increase transparency.
For traders, the key point is mark-to-market risk: Bitcoin’s price fall (over 30% from its early-October 2025 peak near $124,000) cut the portfolio’s dollar value roughly in half even though the BTC amount is unchanged. The “can’t sell” mandate also reduces the recurring market fear of government dumping, effectively removing this supply from circulation.
What to watch next is the audit/oversight bill’s progress and any potential impact on sentiment from increased visibility into government Bitcoin holdings.
Neutral
This is primarily a price-driven mark-to-market change, not a change in supply. The US government’s ~328,000 BTC reserve cannot be liquidated, which reduces near-term “dump” risk compared with past periods where investors feared government or trustee selling. However, the headline—US holdings down to ~$21B—can still weigh on sentiment in the short term because it reinforces that government balance sheets are also exposed to BTC volatility.
In the short run, traders are likely to focus on whether any policy shift would enable sales; the article stresses the opposite (no-selling mandate), which should be supportive for stability. In the medium to long run, the proposed audit legislation could be a double-edged factor: improved transparency may reduce uncertainty and support more orderly positioning, but regulatory process headlines can also create volatility around the bill’s progress.
Overall, since the BTC amount is unchanged and the key constraint is explicit, the net effect on market structure is limited—hence a neutral classification.