On Thursday night, President Donald Trump officially initiated the much-anticipated U.S. strategic bitcoin reserve, fulfilling a significant promise made during his re-election campaign directed at the cryptocurrency sector. However, the market’s reaction was somewhat muted. Following a brief decline, cryptocurrencies regained most of their initial losses. Bitcoin was trading around $88,000, the same value it held before Trump signed the executive order. Ether and Solana made slight gains, while XRP and the Cardano-linked coin saw declines.
Although many viewed the executive order as a sensible move, especially after the unsettling pre-announcement mentioning smaller, riskier coins, it left the crypto community hoping for more. “President Trump unveiled a bitcoin reserve and a crypto stockpile, both funded through the government’s seizure of crypto assets. This isn’t the robust bitcoin reserve some had advocated for,” TD Cowen’s Jaret Seiberg commented in a note on Friday. “We see this as a compromise,” he remarked. The government is not utilizing taxpayer funds to acquire new digital assets; rather, it is choosing not to sell the ones it confiscates.
Seiberg expressed skepticism that the government would procure additional bitcoin for the reserve, despite the President’s instructions, citing political challenges in justifying budget neutrality without imposing extra costs on taxpayers. Still, he acknowledged that the directive is “positive for crypto as it signals White House support for digital assets.” For numerous crypto investors, this also alleviates fears of governmental actions to sell or restrict bitcoin; enhances the probability of other nations investing in bitcoin; and elevates its credibility among financial institutions, wealth managers, and pensions who have been hesitant or discouraged from entering this market.
However, analysts at Compass Point criticized the order as being “essentially nothing,” noting it does not authorize the Treasury Department or other government entities to acquire crypto assets. They further pointed out that it could be easily reversed by a future executive order. “An executive order is not legislation; it is an exercise of executive authority and lacks durability,” analyst Edwin Groshans noted. “Without Congressional legislation, there is no statutory language that only Congress can undo.” He continued, “Honestly, we consider its issuance a dud that will not enhance the value of BTC or any other digital asset, primarily because there is no permission to purchase BTC and acquiring digital assets is expressly prohibited.” Groshans stated that they would reevaluate the significance of the strategic bitcoin reserve once the Treasury and Commerce outline their strategies for acquiring BTC.
Additionally, traditional macro investors remain relatively uninterested, according to Noelle Acheson, economist and author of the “Crypto is Macro Now” newsletter. Currently, she indicated, the macroeconomic climate continues to exert pressure on crypto markets. “There’s nothing imminent to suggest relief from growing concerns about an impending slowdown,” Acheson remarked. “The recent Trump tariff adjustment, which allowed for a one-month reprieve on certain goods, briefly boosted stocks before investors recognized that this back-and-forth is more problematic than a solution.”
