Despite former President Donald Trump’s executive order establishing a strategic Bitcoin reserve for the U.S., the cryptocurrency market saw a decline on Friday. While the move signals government interest in digital assets, the lack of a clear buying strategy disappointed investors, leading to a sell-off.
The executive order confirms that the reserve will consist of Bitcoins already in government possession, primarily those seized through law enforcement actions. However, there was no mention of an acquisition plan, which many had anticipated. Bitcoin’s price dropped 5% following the announcement and later recovered slightly, settling at $87,000, according to Coin Metrics. Other cryptocurrencies, including Ether, XRP, Solana’s SOL, and Cardano’s ADA, also declined after the news.
Rachel Lin, co-founder and CEO of SynFutures, noted that while prices have rebounded somewhat, “the lack of new demand and uncertainty about future government actions are preventing a significant rally.” Investors had hoped for immediate buying pressure, but the order merely instructs officials to explore budget-neutral acquisition strategies—meaning no additional taxpayer spending.
White House crypto and AI czar David Sacks emphasized that the reserve’s formation “will not cost taxpayers a dime”, as it primarily includes forfeited digital assets. Reports from Arkham indicate that the U.S. government currently holds 198,000 Bitcoins worth approximately $17 billion, along with 56 Ether tokens valued at nearly $119 million. However, there was no confirmation of holdings in XRP, Solana, or Cardano.
The lack of an aggressive accumulation plan led to frustration in the market. Steven Lubka, head of private clients at Swan Bitcoin, commented, “It is good news, but not what the market wanted in the short term. People were hoping for near-term buy pressure.” Similarly, Jaret Seiberg from TD Cowen noted that while the decision indicates White House support for crypto, “this is not the aggressive bitcoin reserve some were pressing for.”
Meanwhile, Treasury Secretary Scott Bessent underlined the need to halt Bitcoin sales before considering future acquisitions. Speaking on CNBC’s Squawk Box, he stated, “The first step is to stop selling, and then we’re going to put a plan in place from there.” The administration is expected to discuss its crypto strategy at the White House Crypto Summit.
Market analysts remain cautious, with JPMorgan warning that broader economic concerns, including a tariff war and inflation fears, could dampen crypto’s momentum. Bitcoin briefly returned to the $90,000 mark earlier in the week but now hovers just below it, with some analysts cautioning that failure to sustain this level could trigger a drop toward $70,000.
Despite the initial excitement, the market reaction suggests that investors were hoping for a more proactive stance on Bitcoin accumulation. For now, all eyes are on how the U.S. government navigates its next moves in the evolving crypto landscape.
