Crypto Market Reacts to President Trump’s Bitcoin Reserve Order
The cryptocurrency market continues to experience volatility as traders reassess the impact of trade tensions on global economic activity and President Donald Trump’s recent Executive Order establishing a Strategic Bitcoin Reserve.
Bitcoin has dipped 4.8% to $81,729, while Ethereum has dropped 8%, hovering just above November 2023 prices near $2,000. Dogecoin leads losses among the top 10 cryptos, declining about 13% to $0.16.
Despite the initial excitement surrounding the Executive Order, which officially establishes the Strategic Bitcoin Reserve and authorizes the creation of a digital asset stockpile, the market reaction has been mixed.
Bitcoin Price Slides After Executive Order Announcement
Bitcoin extended its losses on Thursday, falling 5.7% in less than an hour as investors reacted to President Trump’s directive. The decline followed Bitcoin’s surge above $92,000 earlier in the week, fueled by speculation around the initiative. However, the rally faded as traders took profits and reassessed the impact of the government’s digital asset policy. Bitcoin has since rebounded slightly to $87,200, according to CoinGecko data. Ethereum, meanwhile, continues to face selling pressure.
Singapore-based digital asset trading firm QCP Capital noted that the knee-jerk reaction lower likely stems from the realization that no actual budget has been allocated for Bitcoin purchases in the near term.
Indeed, the order directs the Secretaries of Treasury and Commerce to develop “budget-neutral” strategies for acquiring additional Bitcoin but stops short of utilizing taxpayer funds for spot purchases.
David Lawant, head of research at FalconX, observed that the market’s reaction reflects short-term disappointment regarding the U.S. government’s lack of immediate commitment to acquiring crypto assets.
Strategic Bitcoin Reserve and Institutional Impact
Despite the initial market reaction, some industry analysts see the move as a significant milestone for Bitcoin’s institutional acceptance. The Executive Order formally establishes a Bitcoin Strategic Reserve, distinct from the broader Digital Asset Stockpile, which will include a basket of altcoins such as Ethereum.
A senior White House official told Decrypt that President Trump created a strategic reserve exclusively for Bitcoin because his administration views the cryptocurrency as uniquely decentralized and secure.
“Bitcoin is special in our view,” the official stated. “It’s the most secure. It’s the most decentralized. It doesn’t have an issuer. So it deserves special treatment.”
The reserve is expected to be seeded with Bitcoin seized through criminal and civil asset forfeitures, though it remains unclear how much will ultimately be allocated. Currently, U.S. government wallets hold approximately 198,000 BTC (worth about $16.1 billion at current prices), according to Arkham Intelligence. However, some of those holdings originate from exchange hacks and may not be available for the reserve if returned to prior owners.
Future Considerations and Market Outlook
The Executive Order also mandates a 60-day Treasury review of legal and investment considerations for the reserve. Additionally, Treasury and Commerce officials must explore ways to acquire more Bitcoin without impacting the federal budget or costing taxpayers. Potential solutions include reallocating a portion of U.S. gold reserves or tapping into the Exchange Stabilization Fund.
Industry reactions to the order have been largely positive, with analysts suggesting that the move sets a precedent for sovereign Bitcoin adoption. However, short-term market conditions remain uncertain, with price fluctuations driven by regulatory developments and macroeconomic factors.
As the 60-day Treasury review unfolds, investors will be closely monitoring the government’s next steps regarding Bitcoin and broader digital asset policies.
