Key Highlights:
- President Trump’s order establishes a Bitcoin reserve and a separate stockpile of digital assets.
- The government will not actively acquire more crypto, impacting market expectations and sentiment.
- Crypto leaders, including Coinbase and Robinhood, will meet with Trump to discuss industry concerns.
President Donald Trump signed an executive order establishing a strategic Bitcoin reserve alongside a digital asset stockpile, prompting immediate reactions in the crypto industry. The order confirmed Bitcoin as a reserve asset while outlining measures for managing other digital tokens in the government’s possession.
Despite initial optimism from crypto executives, Bitcoin dropped as much as 5.7% before recovering slightly to $88,971.
Other tokens previously mentioned by Trump, including Ether, XRP, Cardano, and Solana, also saw declines following the announcement.
U.S. Bitcoin and Altcoin Holdings Strategy Defined
The executive order outlined two separate initiatives: a strategic Bitcoin reserve and a stockpile of other digital assets.
Apparently, a strategic reserve will hold only Bitcoin, using approximately 200,000 tokens already seized through criminal and civil forfeitures.
The order also directed a full audit of the government’s digital asset holdings to establish an accurate inventory.
Key individuals, including Ken Bessent and Howard Lutnick, received authorization to explore Bitcoin acquisition methods that do not require taxpayer funding.
Meanwhile, the digital asset stockpile will include tokens such as Ether, XRP, Cardano, and Solana, as previously indicated by Trump.
However, the government will not actively seek additional purchases for this stockpile, focusing only on potential Bitcoin acquisitions if they can be budget-neutral.
Market Reaction: What About Buying BTCs?
Bitcoin’s decline followed investor concerns that the government would not be buying additional assets beyond what it already holds.
Traders had anticipated large-scale Bitcoin purchases, which failed to materialize under the executive order’s guidelines.
Other digital assets mentioned in Trump’s plan also experienced declines amid shifting market sentiment.
Industry analysts noted that the U.S. government’s commitment to holding Bitcoin as a reserve asset eliminates concerns about unexpected Bitcoin liquidations, such as those linked to Silk Road forfeitures.
Per Bloomberg, according to QCP Capital, while the executive order reaffirmed the country’s long-term strategy for digital assets, it did not provide the aggressive buying activity some investors had expected.
Elsewhere, Stefan von Haenisch, director of over-the-counter trading in Asia Pacific at crypto custody firm Bitgo Inc., stated that the lack of new buying weighed on the market.
Investors had previously entered positions in anticipation of government acquisitions, leading to sell-offs after the announcement.
Shayan Salehi, a German tech entrepreneur, told Al Jazeera that the decision not to acquire additional assets could trigger a bearish market response.
Meanwhile, Spencer Hakimian, founder of New York-based Tolou Capital Management, described the order as “very underwhelming,” highlighting the government’s hesitation to buy more Bitcoin unless it could be done in a revenue-neutral way.
Crypto Leaders Meet With Trump Administration
The executive order signing coincided with an upcoming meeting at the White House between Trump and representatives of major crypto firms like Coinbase and Robinhood.
This is a discussion meant to address regulatory concerns and the changing place of digital assets in the financial system.
Reports say that the U.S. government currently has approximately $16.4 billion worth of Bitcoin and about $400 Million of other digital tokens, mostly as a result of asset forfeitures.
However, others see the executive order as largely symbolic, because it recognizes Bitcoin as a Reserve asset for the first time ever.
Industry participants reacted to the announcement in mixed voices. On one hand, the decision was perceived as a stabilising measure for government held digital assets.
On the other, there was no indication of fresh Bitcoin purchases, a signal for a bearish future. Those investors who had bought in anticipating government acquisitions unwound and the asset faced price corrections immediately.
Disclaimer
In this article, the views, and opinions stated by the author, or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.
