Cryptocurrency experiences a decline of up to 6 percent as investor disappointment grows over the absence of government purchase strategies.
The executive order from United States President Donald Trump, aimed at creating a Bitcoin strategic reserve along with a stockpile of various digital assets, has failed to excite the cryptocurrency market, resulting in a significant drop in Bitcoin’s value post-announcement.
Following Trump’s order on Thursday, Bitcoin plummeted by as much as 6 percent as it lacked indications of government buying initiatives.
After sinking to a low of $84,900, the cryptocurrency was trading around $87,700 by 05:00 GMT.
In his announcement, Trump’s crypto advisor David Sacks stated that the “Strategic Bitcoin Reserve” and “Digital Asset Stockpile” would be funded by assets forfeited through criminal or civil cases.
“This means it will not cost taxpayers anything,” Sacks mentioned on X.
“It is estimated that the US government possesses about 200,000 Bitcoin; however, a complete audit has never been conducted. The E.O. (executive order) mandates a thorough accounting of the federal government’s digital asset holdings.”
Sacks further noted that the order instructed the Secretaries of Treasury and Commerce to formulate “budget-neutral strategies for acquiring more Bitcoin,” as long as there is no financial burden on US taxpayers.
Trump’s order emerged after he had repeatedly announced intentions to create a cryptocurrency reserve or stockpile, part of his goal to position the US as the “crypto capital of the planet.”
Nevertheless, some cryptocurrency supporters expressed disappointment.
Shayan Salehi, a tech entrepreneur from Germany, referred to the government’s refusal to acquire additional assets as “well-known phrases that could trigger a bear market.”
“Market reaction is subdued,” said Spencer Hakimian, founder of New York-based Tolou Capital Management, in a post on X, sharing a screenshot of the graph depicting Bitcoin’s decline.
Hakimian described the plan as “highly underwhelming.”
“They won’t be purchasing any new Bitcoin unless they can do so in a revenue-neutral manner. Nothing the federal government does is revenue neutral,” he emphasized.
The US is believed to hold around 200,000 Bitcoin obtained through criminal and civil forfeiture.
Sacks proposed that the reserve would operate similarly to a “digital Fort Knox,” assisting in maintaining Bitcoin’s value.
“Premature sales of Bitcoin have already resulted in over $17 billion in lost value for US taxpayers. Now, the federal government will implement a strategy to maximize the worth of its holdings,” he mentioned.
Besides the Bitcoin reserve, Sacks indicated that a separate stockpile would be created for “digital assets beyond Bitcoin that have been forfeited in criminal or civil cases.”
This stockpile could encompass tokens like ether, XRP, Solana, and Cardano—assets referenced by Trump earlier this week in a social media update regarding his cryptocurrency reserve plans.
The value of Bitcoin surged following Trump’s election in November, reaching an all-time high of $109,071 in mid-January.
However, the president’s support for cryptocurrency has faced scrutiny due to his family amassing billions in crypto wealth, including through a Trump meme coin launched in January.
Critics of Bitcoin and similar cryptocurrencies have cautioned that these assets lack intrinsic value, comparing their escalation to a Ponzi scheme.
