Bitcoin Slips as Trump’s Strategic Crypto Reserve Plan Fails to Impress
Cryptocurrency markets remained largely stable on Friday morning, recovering slightly after a dip on Thursday when President Donald Trump signed an executive order establishing a strategic Bitcoin reserve and a separate “digital asset stockpile” for the U.S.
At 04:58 a.m. ET, Bitcoin traded at $88,949.16, according to Coin Metrics.
Bitcoin saw a sharp drop affect digital assets
Following the reserve’s announcement, Bitcoin saw a sharp drop to $84,688.13. Other digital assets, including Ether, XRP, and Solana’s SOL, also suffered losses but showed signs of stabilizing by Friday.
David Sacks, the White House’s crypto and AI policy lead, elaborated on X that the Bitcoin reserve would consist of assets already seized by the U.S. government from prior legal actions. He assured that taxpayers would not bear any additional costs for this initiative. Data from Arkham suggests that the U.S. currently possesses over 198,000 bitcoins, valued at around $17 billion.
The separate digital asset stockpile will encompass various cryptocurrencies obtained through forfeiture cases, with no further acquisitions planned beyond these holdings. Reports indicate that while the government has around 56 ether tokens worth approximately $119 million, it does not currently hold XRP, Solana, or Cardano assets.
Investor sentiment took a hit
Investor sentiment took a hit as the lack of immediate Bitcoin purchases dampened market expectations, especially amid broader economic uncertainty and weak stock market performance. “While this is a positive long-term development, short-term market players were hoping for immediate buying pressure,” said Steven Lubka of Swan Bitcoin.
While the executive order allows the Treasury and Commerce Departments to consider cost-neutral strategies for obtaining more Bitcoin, there is no official plan to expand the government’s holdings beyond its current assets.
This announcement follows Trump’s recent hints regarding the anticipated Bitcoin reserve and comes just ahead of the first White House Crypto Summit. However, broader concerns about inflation and trade disputes have weighed heavily on the crypto market, overshadowing any optimism surrounding the initiative.
JPMorgan analysts stated on Wednesday that they do not expect significant price surges for cryptocurrencies in the near future due to ongoing economic uncertainty.
Bitcoin briefly touched the $90,000 mark earlier in the week but now sits just below it. Analysts warn that a failure to maintain this level could lead to a more substantial decline toward $70,000.
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