Bitcoin drops 6% after Trump’s reserve plan lacks new government purchases.
Altcoins fall 4%-9% as the market reacts to uncertain crypto reserve strategy.
Investors disappointed as U.S. Bitcoin stockpile consists only of seized assets.
Bitcoin price tumbled after U.S. President Donald Trump signed an executive order to establish a Strategic Bitcoin Reserve, but without committing to new purchases.
BTC/USD 1-day price chart. Source: CoinMarketCap
BTC fell nearly 5%, dropping from $90,400 to $84,979, before rebounding slightly to $86,460, according to CoinMarketCap. Market participants had anticipated a more aggressive approach, including government-led acquisitions. Instead, Trump’s crypto czar David Sacks confirmed the reserve would only hold Bitcoin obtained through criminal forfeitures.
Bitcoin Price Slides After Executive Order
Bitcoin lost momentum within minutes of the announcement, erasing gains from earlier in the week. Altcoins followed, with Ethereum (ETH), XRP (XRP), Solana (SOL), and Cardano (ADA) all registering losses between 4% and 9%.
“The government will not acquire additional assets for the stockpile beyond those obtained through forfeiture proceedings,” Sacks stated on X.
While the move formalizes U.S. holdings, it dashed hopes for an immediate buying spree that could have supported Bitcoin’s price.
Bitcoin drops as Trump’s BTC reserve lacks clarity. Source: The Kobeissi Letter/X
Trading resource The Kobeissi Letter noted the price drop stemmed from a lack of clarity on how the reserve would be funded.
“There was no explanation on how the reserve will be funded aside from Bitcoin already held by the U.S.,” the firm wrote.
Market Participants Split on Long-Term Impact
The announcement sparked mixed reactions. Some analysts saw it as a bullish step toward institutional adoption, while others viewed it as underwhelming.
Source: Walker
Electric Capital CEO Avichal questioned the sell-off, stating on X, “Who the hell sells the news of a U.S. Strategic Bitcoin Reserve?!” Meanwhile, trader Ash Crypto remained optimistic, posting, “THIS IS NOT BUY THE RUMOR SELL THE NEWS EVENT, EVERY COUNTRY WILL FOLLOW SOON AND BITCOIN IS GOING TO $250,000+.”
Dennis Porter, CEO of Satoshi Action Fund, echoed a similar sentiment. “This market is way off. The ‘Strategic Bitcoin Reserve’ will have ‘additional bitcoin’ acquisitions,” he claimed.
Matt Hougan, chief investment officer at Bitwise, noted that the Strategic Bitcoin Reserve reduces the likelihood of a Bitcoin ban in the U.S. but does not involve government-backed purchases. The executive order only permits “budget-neutral” acquisition strategies, meaning no taxpayer funds will be used to buy additional Bitcoin.
Glassnode Data Highlights Critical Support Zone
On-chain analytics firm Glassnode identified $71,000 as a crucial price level. The firm’s UTXO Realized Price Distribution (URPD) chart indicated that very few investors acquired Bitcoin between $70,000 and $92,000, creating an “air gap” that left the price vulnerable.
Bitcoin Realized Price – UTXO Age Bands. Source | CryptoQuant
“With significant confluence across several key cost basis metrics, this price region becomes an area of interest, perhaps being the final defense line for the bulls in the event of a complete capitulation,” Glassnode noted.
Source: Captain Faibik/X
Additionally, Captain Faibik, a technical analyst, pointed to a falling wedge pattern on Bitcoin’s daily chart.
“Still, I’m bullish on Bitcoin & expecting a bull rally in the coming weeks,” he wrote on X.
Strategic Reserve Raises More Questions Than Answers
Trump’s order directs the Treasury and Commerce Secretaries to explore “budget-neutral” ways to acquire more Bitcoin without burdening taxpayers. However, the specifics remain unclear.
“The Secretaries of Treasury and Commerce are authorized to develop budget-neutral strategies for acquiring additional Bitcoin, provided that those strategies have no incremental costs on American taxpayers,” Sacks stated.
For now, the U.S. Bitcoin stockpile consists of assets seized in civil or criminal forfeitures. While the move legitimizes Bitcoin’s role in government reserves, market participants appear unimpressed by the lack of direct investment.
Bitcoin’s price remains volatile, with traders watching for any signals that the reserve could evolve into a more aggressive accumulation strategy. For now, uncertainty prevails.
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.
