Isabella García
Bitcoin’s price took a significant hit following U.S. President Donald Trump’s decision to establish a Strategic Bitcoin Reserve through an executive order.
Shortly after White House AI and Crypto Czar David Sacks announced the news on X, Bitcoin tumbled from $90,200 to approximately $85,400 before rebounding to $87,271, reflecting a 4.9% decline over the past 24 hours. Ether also faced a drop, losing 5.3% to trade at $2,159, according to PRIME’s price tracker.
Market experts suggest the lack of an immediate price surge indicates a “buy the rumor, sell the news” reaction.
“Bitcoin isn’t reacting with a parabolic move, which suggests traders had already priced in the announcement,” said Peter Chung, Head of Research at Presto Research.
“It’s still early, so we may see increased volatility as the market digests the news.”
What the Executive Order Means for Bitcoin
According to David Sacks, Trump’s executive order officially launches:
- A Strategic Bitcoin Reserve, which will be funded using Bitcoin seized through criminal and civil asset forfeitures.
- A U.S. Digital Asset Stockpile for non-BTC digital assets obtained through similar legal actions.
Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick have also been authorized to develop budget-neutral strategies for acquiring additional Bitcoin, without imposing extra costs on taxpayers.
Traders React: Reserve Funding Model Disappoints Some Investors
While some expected the move to be highly bullish, others were disappointed that the reserve will be funded only through seized Bitcoin, rather than through direct government purchases.
“Traders were hoping for large-scale Bitcoin acquisitions by the U.S. government,” said Nick Ruck, Director at LVRG Research.
“Instead, the announcement signaled that no new Bitcoin will be purchased, which led to a ‘sell-the-news’ reaction.”
Analysts are now watching for additional details regarding the government’s long-term strategy, particularly how it plans to expand its Bitcoin holdings in a “budget-neutral” way.
“If the U.S. outlines a structured plan to acquire Bitcoin beyond seized assets, the market reaction could shift,” noted Chung.
“Additionally, any discussion on how these assets will be utilized to drive economic growth could be key moving forward.”
Trump’s Upcoming Digital Asset Summit
On Friday afternoon, Trump will host a digital asset summit in Washington, D.C., with several top crypto executives expected to attend.
“There’s no concrete promise of major policy shifts at the summit, but some traders are hopeful for surprise announcements,” Ruck stated.
Global Impact: Will Other Countries Follow Suit?
Some experts believe the U.S. move could accelerate global Bitcoin adoption at the governmental level.
“This decision significantly lowers the chances of a Bitcoin ban in the U.S.,” said Matt Hougan, CIO of Bitwise.
“It may also prompt other countries to launch their own Bitcoin reserves before the U.S. starts accumulating more.”
Additionally, institutions like the IMF may now face greater difficulty positioning Bitcoin as an unstable or inappropriate asset, further boosting institutional and governmental adoption worldwide.
