Bitcoin (CRYPTO: BTC) is going to be held in a United States Strategic Bitcoin Reserve, according to comments by President Donald Trump and an executive order issued on March 6. This is a watershed moment for the coin, and it might be just the first of a series of similar catalysts if other governments around the world follow suit.

Here's how the reserve -- if it comes into being -- could help the king of cryptocurrency, and what you can do to get some upside.

Per the White House, the new Strategic Bitcoin Reserve will be stocked with Bitcoin that the Department of Treasury came into the possession of via criminal or civil asset forfeitures, as well as via other avenues that do not involve buying it directly.

All executive federal agencies are now obligated to review their cryptocurrency holdings and determine whether they have the authority to transfer those holdings to the repository.

Once that review is done and the reserve actually exists -- assuming it ever does -- it is probable that there will be another instruction that tells those agencies to actually transfer their coins to be held in one central location. Once Bitcoins are deposited, they will not be sold and are instead intended to be retained, potentially indefinitely. Note that executive orders can be rescinded easily, so there's a lot of uncertainty here.

But the formation of the Strategic Bitcoin Reserve is something that many in the crypto industry are looking forward to. Though it isn't exactly the fulfillment of their wildest dreams.

However misplaced, there were widespread hopes that the government would commit to buying Bitcoin and other cryptocurrencies at fair market value to build up a cache worth billions of dollars, and this policy isn't that. Nor is it clear whether the reserve will ever be implemented; there may be legal or political barriers that prevent it from being realized as defined by the executive order.

Importantly, the market has not exactly reacted very warmly to the proposal. Bitcoin's price is down by around 16% in the last 30 days, which isn't very much in the big scheme of things, but it's a lot considering that period of time featured one of the biggest ever policy announcements that should support higher prices for the coin. The implication here is that investors were probably originally a bit too bullish about what the reserve would be.

The good news is that the new stash of coins, if it is actually implemented, would mesh neatly with Bitcoin's investment thesis in a way that would make it an even more appealing coin to hold over the long term.

If the government refuses to sell any Bitcoin that it comes into possession of, that would be equivalent to there being less Bitcoin in circulation. With less supply circulating, it would be scarcer, meaning that investors looking to buy it would be willing to pay higher prices in order to ensure that they can hold the asset. This would occur alongside other preset drivers of scarcity, like increasing mining difficulty over time as mediated by the halving.

Over the course of years, the additional price impulse from the government holding coins could be significant. It's estimated that the U.S. now holds about 200,000 Bitcoins, which would currently be worth about $16 billion.

Per the White House, the U.S. has in its history sold off approximately $17 billion worth of Bitcoin. If it retains a similar amount moving forward, eventually it could be a notable holder relative to the coin's total market cap today of nearly $1.7 trillion. As there can only ever be 21 million Bitcoins in total, any coins the government gets now may be much more valuable in the future.

So, what's an investor to do? I think the answer is simple: Buy Bitcoin, and hold it. Dollar-cost averaging is your friend here, as there's absolutely no rush to accumulate the asset given a long-term outlook on holding it. If the Bitcoin reserve shapes up in the way Trump  outlined, you can let the government's inability to sell help boost the price of your investment over time.

Then, enjoy your profits when you're ready.

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Alex Carchidi has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

Here's What the Strategic Bitcoin Reserve Could Mean for Bitcoin was originally published by The Motley Fool