Bitcoin and other cryptocurrencies fell on Thursday after President Donald Trump signed an executive order establishing a Strategic Bitcoin Reserve and a Digital Asset Stockpile for the United States. While the announcement had been highly anticipated, the lack of plans for immediate government purchases disappointed investors, triggering a sell-off.
Market reaction
Bitcoin fell as much as 6%, dropping to $84,688 at its lowest point before recovering slightly to trade around $87,586. Ether was down 2%, while XRP and Solana lost 1% and 3%, respectively. Cardano’s ADA token saw the biggest drop, falling 13%.
The decline came after Trump’s crypto and AI advisor David Sacks confirmed that the reserve would consist only of Bitcoin already owned by the U.S. government, mainly from seized assets in law enforcement actions. This meant there were no immediate plans for government purchases, which had been a key expectation driving recent market speculation.
“It is good news, but not what the market wanted in the short term,” said Steven Lubka, head of private clients at Swan Bitcoin. “People were hoping for near-term buy pressure.”
Details of Trump’s crypto order
The executive order directs the U.S. government to retain its Bitcoin holdings, which currently stand at approximately 198,000 BTC worth $17 billion. It also establishes a separate stockpile for other forfeited digital assets, such as Ethereum, XRP, Solana, and Cardano, but does not authorize new acquisitions beyond those obtained through legal seizures.
Trump had previously promised to make the United States the “Crypto Capital of the World”, fueling speculation that his administration might aggressively invest in Bitcoin. However, the executive order instead directs the Treasury and Commerce departments to develop “budget-neutral” strategies for acquiring additional Bitcoin, meaning any purchases must come at no extra cost to taxpayers.
Investor disappointment and broader uncertainty
The announcement came as the crypto market was already under pressure from broader economic concerns, including Trump’s ongoing trade war and inflation worries. Analysts at JPMorgan had warned earlier this week that crypto markets faced weaker demand and short-term downside risks.
Bitcoin had briefly surged past $90,000 earlier this week but struggled to hold that level. Some investors fear that without strong buying pressure, Bitcoin could pull back further, possibly toward the $70,000 range.
Meanwhile, skepticism remains about how the Strategic Bitcoin Reserve will be used. While Sacks compared it to a “digital Fort Knox”, meant to prevent premature government sales that could depress prices, critics argue that the lack of a clear acquisition strategy limits its impact on the market.
The road ahead
Trump is set to host the first White House Crypto Summit on Friday, where further details about the administration’s digital asset policies may emerge. However, for now, the crypto market remains in a wait-and-see mode, with traders reassessing expectations about government involvement in the space.
