Jonathan Raa | Nurphoto | Getty Images
Bitcoin experienced a decline on Monday amid ongoing price volatility for the global leader in cryptocurrency. This followed an executive order signed by President Donald Trump aimed at establishing a strategic bitcoin reserve for the United States.
As of 9:42 a.m. Singapore time, Bitcoin was priced at $81,712, down more than 5% but recovering from earlier lows, according to Coin Metrics.
This reserve will be sourced from coins confiscated in criminal and civil forfeiture cases, with no current plans for the U.S. government to purchase additional bitcoin. Following last Thursday’s announcement regarding the reserve, cryptocurrency prices fell as the market anticipated a more aggressive strategy.
Other cryptocurrencies also saw declines on Monday. Both ether and XRP both dropped approximately 7.5% around 9:43 a.m. Singapore time.
Despite this, some investors are optimistic about the long-term implications of the reserve strategy.
“I truly believe the market is misinterpreting this,” remarked Matt Hougan, chief investment officer at Bitwise Asset Management, during an appearance on CNBC’s “Squawk Box Asia” on Monday. “The market is currently disappointed in the short term that the government did not commit to immediately acquiring 100,000 or 200,000 bitcoins,” he added.
Hougan referenced comments made by David Sacks, the White House Crypto and AI Czar, indicating that the U.S. would seek “budget-neutral strategies for acquiring additional bitcoin, ensuring there are no added costs for American taxpayers.”
According to Hougan, “The critical question is: does this executive order increase the likelihood that bitcoin will become a significant geopolitical currency or asset in the future? Will other nations follow the U.S.’s example and establish their own strategic reserves? My answer is a resounding yes.”
“This question is crucial because it ultimately determines whether bitcoin will be valued at $80,000 or $1 million per coin.”
He characterized the downturn in cryptocurrency prices as a “temporary setback.”
“I anticipate that the market will soon stabilize and come to recognize that this is a considerably bullish development for both this asset and the broader crypto market,” he stated.
