Bitcoin’s value fell sharply after US President Donald Trump’s executive order on a Strategic Bitcoin Reserve disappointed market expectations. The drop mirrors declines in US stock markets, as investors worry about a widening global trade war.
On Thursday, Trump signed an order to establish a Strategic Bitcoin Reserve, fulfilling a campaign pledge to strengthen America’s crypto sector. White House Crypto and AI czar David Sacks confirmed the move in a post on X. However, the market response was underwhelming.
Markets React Negatively
Bitcoin’s price initially plunged from above $90,000 (€83,290) to about $84,600 (€78,300) before recovering to $87,000 (€80,520) by early Friday morning. Crypto enthusiasts expressed disappointment after Sacks clarified that the reserve would only consist of Bitcoin obtained through criminal and civil forfeitures. The government will not purchase additional Bitcoin using taxpayer funds.
The order also confirms that the US will retain its existing 200,000 Bitcoin holdings as a store of value. According to the White House, previous premature Bitcoin sales cost US taxpayers over $17 billion. The new strategy aims to maximise the value of government-owned Bitcoin.
Broader Market Trends
Trump’s recent trade tariffs have rattled investors. His announcement of a 25% tariff on Canada and Mexico, alongside a 10% tariff on Chinese imports, contributed to Bitcoin’s downward trend. Bitcoin has fallen 6% this year, mirroring the Nasdaq’s 6.4% decline, as cryptocurrencies increasingly track traditional risk assets.
“Bitcoin remains highly reactive to macroeconomic trends,” noted Uldis Teraudklans, Chief Revenue Officer at Paybis. With Wall Street firms deeply invested, liquidity shifts continue to drive volatility in the crypto market.
