Bitcoin Prices Drop as Trump’s Executive Order on Strategic Bitcoin Reserve Disappoints Investors

Bitcoin prices declined by over 5% on Friday after White House crypto advisor David Sacks stated that the US government would not use taxpayer funds to build a strategic Bitcoin reserve. Other major cryptocurrencies, including Ethereum, XRP, Cardano, and Solana, also experienced declines of up to 5%.

Trump’s Executive Order on Bitcoin Reserve

A day before meeting with cryptocurrency industry executives at the White House, sitting President Donald Trump signed an executive order to establish a strategic Bitcoin reserve. This reserve will be funded using Bitcoin assets that the US government has acquired through criminal and civil asset forfeiture proceedings. Billionaire David Sacks shared this information on the social media platform X.

Digital Assets Included in the Reserve

Trump named five cryptocurrencies that will be included in the reserve, leading to a surge in their market values. These digital assets are Bitcoin, Ethereum, XRP, Solana, and Cardano. According to reports, the US currently holds approximately $16.4 billion worth of Bitcoin and $400 million worth of seven other cryptocurrencies, mainly obtained through legal asset forfeitures.

Purpose and Strategy of the Reserve

David Sacks put forward the point that the US government would not sell any Bitcoin kept in reserve; instead, it would act as a store of value digital version of Fort Knox-reinforcing Bitcoin’s reputation as “digital gold.” The executive order also instructs the Treasury and Commerce Departments to look into “budget-neutral strategies” for buying more Bitcoin without costing American taxpayers a dime. 

Market Reactions and Investor Sentiment

The news in question prompted a rapid change in the cryptocurrency market, as Bitcoin and a variety of altcoins saw a downward action nearly instantly. With this policy assessment in mind, investors take on a very cautious approach, giving their opinions on how it could shape the overall crypto landscape. Supporters see that reserve as bullish for Bitcoin due to its long-term value, although one quick look at how the reserve would be growing without taxpayer funding raises serious questions about how it shall be managed. 

Conclusion

The establishment of a strategic Bitcoin reserve by the US government marks a giant leap in cryptocurrency adoption in the state. Yet, for now, questions linger concerning its implementation, funding, and overall effects on the current market. As the regulatory frameworks are constructed, investors will keep track of the developments to gauge just how this policy will affect the function of Bitcoin in the financial system.