White House Bitcoin reserve faces hurdles as dollar longs hit $27.8B

The White House is still developing operational plans for a Strategic Bitcoin Reserve as federal departments compete for control of the initiative, according to a report.

The inter-agency dispute centers on which department would manage the Bitcoin holdings, with multiple agencies staking claims, the report said. The operational uncertainty shows the complexity of establishing a sovereign digital asset reserve without clear precedent in US financial policy.

The dollar's strength creates a difficult macro backdrop for the initiative. Speculative traders have piled into the greenback at the fastest pace in over a decade, with net long dollar positions reaching $27.8 billion as of June 9, according to CFTC data. That marks the highest level since February 2025 and caps 13 consecutive weeks of bullish dollar bets. The Bloomberg Dollar Spot Index has risen roughly 1.6% since the escalation of Middle East conflict in late February. The swing from roughly $22 billion in short dollar positions before the conflict to $27.8 billion long represents a nearly $50 billion reversal in sentiment.

Bank of America FX strategist Alex Cohen said fundamentals remain favorable for the greenback, suggesting the bullish positioning could persist as long as geopolitical instability and supportive US economic data continue to underpin demand. Leveraged funds have also pushed bearish yen bets to their most negative levels since 2017, further illustrating the broad-based appetite for dollar strength across currency markets.

The inverse correlation between the dollar and crypto creates a specific challenge for the reserve's timing. Rising oil prices, which have accompanied the Middle East escalation, feed into inflation expectations and support the case for tighter monetary policy. Tighter policy means higher real yields on dollar assets, making non-yielding assets like Bitcoin less attractive on a relative basis. For the government, however, a weaker crypto market could reduce the acquisition cost of building the reserve.

If the US successfully implements a Strategic Bitcoin Reserve, it would provide unprecedented legitimacy to Bitcoin as a sovereign asset class, potentially triggering a wave of adoption by other nations and institutional investors, according to the report. The White House has not announced a timeline for resolving the operational structure.

The outcome of the White House deliberations carries implications beyond US borders. Other nations are watching the US approach as a potential template for their own digital asset strategies. A successful US Bitcoin reserve could trigger a competitive dynamic among sovereign wealth funds and central banks, reshaping how nations allocate to digital assets.

This article is for informational purposes only and does not constitute investment advice.