Bitcoin’s price rollercoaster continues! After a brief surge following President Trump’s announcement of a crypto strategic reserve, Bitcoin took a significant dive. Let’s break down what happened.
The Rollercoaster Ride
Bitcoin briefly soared past $90,000 after the announcement, even flirting with $95,000. But this rally was short-lived. The price quickly plummeted, dropping from around $94,770 to as low as $82,681 in just a day. Other major cryptocurrencies followed suit, experiencing a widespread slump. Currently, Bitcoin’s price is fluctuating wildly, significantly below its all-time high.
What Caused the Drop?
The initial excitement surrounding Trump’s announcement quickly faded as details remained scarce. The statement lacked specifics on how the reserve would be funded beyond existing US crypto holdings. It simply confirmed a commitment to retaining crypto assets, leaving many investors unsure about the future.
This lack of clarity sparked debate among analysts and enthusiasts. While many supported the inclusion of popular altcoins like Solana (SOL), XRP, and ADA, others, like financial commentator Peter Schiff, voiced concerns. Schiff argued the government should focus on seized assets and avoid purchasing additional cryptocurrencies.
Support for Bitcoin Remains
Despite the price drop, prominent figures in the crypto space continue to express their support for Bitcoin and the executive order. Metaplanet CEO Simon Gerovich highlighted the order’s significance, emphasizing that it authorizes the government to acquire Bitcoin without impacting taxpayers.
How Could the US Acquire Bitcoin?
Gerovich outlined two potential paths for the US government to build its Bitcoin reserve:
- Using the Exchange Stabilization Fund:
Trump could utilize this fund, which holds $39 billion in assets, to directly purchase Bitcoin.
- Congressional Approval: This route aligns with Senator Lummis’ Bitcoin Bill, proposing the government acquire 200,000 Bitcoins annually for five years. Senator Lummis herself welcomed the executive order as a positive first step. Crypto law expert MetaLawman further supported this approach, referencing a section of the bill that allows the Treasury to buy 1 million Bitcoins over five years.
The situation remains fluid, and Bitcoin’s price will likely continue to fluctuate as the market digests the implications of Trump’s announcement and the potential paths for acquiring Bitcoin.
