Bitcoin Drops $5,000 as U.S. Launches Strategic Bitcoin Reserve! $200 Billion Market Meltdown — What’s Next?

The U.S. government made a major move in crypto, with President Donald Trump approving a strategic Bitcoin reserve. This effort, financed by confiscated assets, protects Bitcoin holdings without using taxpayer money. Moreover, crypto industry leaders are meeting in Washington soon, where more updates may emerge. Although many expected a bullish development, market reactions have been turbulent, causing Bitcoin to plunge before finding stability. 

No Cost to Taxpayers: USA’s Bitcoin Reserve

The president of the United States, Donald Trump, has signed an executive order. The order is about the creation of a strategic Bitcoin reserve. This will start and be founded by the seized assets. David Sacks broke this news in an X post. He said, “Just a few minutes ago, President Trump signed an Executive Order to establish a Strategic Bitcoin Reserve.”. He also claimed, “The Reserve would be capitalized with Bitcoin owned by the federal government that was forfeited.” He also highlighted that these would be a part of assets seized in criminal and civil cases.

Just a few minutes ago, President Trump signed an Executive Order to establish a Strategic Bitcoin Reserve.

The Reserve will be capitalized with Bitcoin owned by the federal government that was forfeited as part of criminal or civil asset forfeiture proceedings. This means it…

— David Sacks (@davidsacks47) March 7, 2025

Sacks also claimed that with the mentioned strategy, the reserve would not cost citizens money and would not come from taxpayers. He also mentioned that this reserve works like a digital Fort Knox for Bitcoin. This means that any BTC in the reserve will not be sold. Moreover, Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick are now permitted to acquire additional bitcoins for the reserve. However, it is mentioned that these Bitcoins should be acquired through budget-neutral strategies. So as not to incur costs for American taxpayers. 

America’s Digital Wealth: Federal Bitcoin Holdings Unveiled

Trump’s executive order also asks for an accounting of all digital assets in the federal government’s holdings. Based on the Bitcoin Treasury’s data, the Federal Government of the United States now has 198,109 Bitcoin. This amount is equal to approximately $17 billion, as Bitcoin trades at $87,192.16. Finally, sacks ended his announcement by thanking the president for his support of this cutting-edge technology. He added that he is thankful for Trump’s rapid execution, leadership, and vision.

While this news was a positive development for the crypto community overall, some members were not pleased with the president’s actions. President Trump signed this order for a Bitcoin strategic reserve when, less than 7 days ago, he mentioned a “crypto strategic reserve.” In his Sunday Truth social post, he announced a reserve with BTC, ETH, XRP, SOL, and ADA. However, you can say he has almost delivered, as this executive order also created a US digital asset stockpile. For now, at least, this Stockpile will not receive assets in any way other than forfeiture proceedings.

Bitcoin Drops $5K Ahead of Trump’s Digital Asset Summit

This afternoon, essential figures in the crypto world will be at the digital asset summit hosted by Trump. As such, today, we can expect further crypto developments from Washington, DC. Although some are calling this development bullish, for now, the market has not reacted positively to this news. The market has lost nearly $200 billion in capitalization since the announcement, which is equal to 5%. BTC dropped almost $5,000 before recovering and now is trading near the $88K mark.

Will New Policies Stabilize or Disrupt the Market?

As crypto executives gather in Washington, new policy updates could shape the industry’s future. If the government clarifies its approach to digital assets, market stability may improve. However, continued uncertainty about the digital asset stockpile could maintain volatility. The BTC reserve could strengthen the government’s role in the crypto economy, creating new opportunities and challenges. However, long-term success requires clear policies that encourage innovation while ensuring financial stability.