Bitcoin experienced a decline following a disappointing executive order from US President Donald Trump that left markets unsettled. This downturn in cryptocurrencies reflects the downward trend in US stock markets, fueled by concerns over an escalating global trade war.
On Thursday, US President Donald Trump signed an executive order to create a Strategic Bitcoin Reserve, as reported by David Sacks, the White House’s Crypto and AI czar, in a post on X.
This move represents a significant step toward fulfilling a campaign promise by President Trump to “make America the crypto capital of the world.”
Markets Disappointed by Trump’s Order
Despite initial hopes, the announcement did not provide the expected lift for Bitcoin. Its value dropped from over $90,000 (€83,290) to around $84,600 (€78,300) before recovering to approximately $87,000 (€80,520) by 5 am CET.
The executive order left crypto enthusiasts disheartened, as Sacks noted in his post that the Reserve would be funded with Bitcoin seized through criminal and civil forfeiture, meaning no taxpayer dollars would be used to purchase cryptocurrencies. “The government will not acquire additional assets for the Stockpile beyond those obtained through forfeiture proceedings,” he clarified.
The announcement reiterated that the government will keep its existing holdings of 200,000 bitcoins as a reserve: “The US will not sell any bitcoin allocated to the Reserve. It will serve as a store of value,” and “Premature sales of bitcoin have already resulted in over $17 billion in losses for U.S. taxpayers. Now the federal government will implement a strategy to enhance the value of its assets.”
Additionally, Trump’s order includes the creation of a US Digital Asset Stockpile, which will consist of digital assets other than Bitcoin that have been forfeited in civil or criminal cases.
Bitcoin’s Correlation with Risk Assets
Bitcoin saw a surge last Sunday after Trump announced via Truth Social that he would instruct the Presidential Working Group to advance a Crypto Strategic Reserve, which would encompass five digital tokens, including Bitcoin, Ethereum, XPR, Solana, and Cardano. This announcement triggered a brief rally in these cryptocurrencies, with Bitcoin rising from approximately $86,000 (€79,600) to over $94,000 (€87,000). However, these gains were wiped out the following day when Trump confirmed a 25% tariff on imports from Canada and Mexico and an additional 10% tax on goods from China.
Bitcoin has been on the decline since reaching an all-time high of over $109,000 (€100,880) on January 20, the day of Trump’s inauguration. The largest cryptocurrency dropped below $80,000 (€74,000) on February 28, marking its lowest point since November 2024 and its poorest monthly performance in three years.
This downturn reflects a wider selloff in US stock markets as Trump’s tariffs rattled investors, raising fears of an expanding global trade war that could severely impact economic growth.
Cryptocurrencies often move in sync with traditional risk assets, especially US tech stocks. Bitcoin is down 6% this year, closely mirroring the 6.4% year-to-date decline of the tech-heavy Nasdaq index.
“So far this year, Bitcoin has shown a greater sensitivity to macroeconomic factors, including trade disputes and interest rate movements. With substantial exposure from major Wall Street firms, it is more vulnerable to considerable liquidity changes, contributing to its volatility,” noted Uldis Teraudklans, Chief Revenue Officer at Paybis, in a statement.
