President Trump’s recent executive order establishing a national Bitcoin and cryptocurrency reserve sent shockwaves through the crypto market. The announcement, which involved using seized crypto assets instead of auctioning them off, led to a quick $5,000 drop in Bitcoin’s price.
A Sudden Price Drop
Bitcoin (BTC) plummeted from around $90,251 to $85,091 within an hour of the order’s signing. However, the price has since partially recovered, trading around $87,202 at the time of writing. This price fluctuation is often referred to as a “sell the news” event, where investors react negatively despite positive news.
Details of the Executive Order
The executive order creates two key initiatives: a Strategic Bitcoin Reserve and a US Digital Asset Stockpile. The Reserve will hold Bitcoin seized from criminal activities, estimated to be around 200,000 BTC (though a full audit is pending). The government plans to hold these assets as a store of value, rather than selling them. This is intended to prevent past losses, estimated at over $17 billion due to premature sales.
The Digital Asset Stockpile will include other cryptocurrencies seized in criminal or civil proceedings. The government won’t be actively purchasing additional assets for either the Reserve or the Stockpile.
Official Statements and Market Reaction
White House AI and crypto advisor David Sacks praised the executive order, highlighting its budget-neutral nature and President Trump’s commitment to making the US a global leader in the crypto space. He also thanked key figures in the administration for their roles in making this happen.
The price drop followed a significant surge in Bitcoin’s value after Trump’s initial campaign promise to create the reserve. Following the election, Bitcoin prices rose from approximately $65,000 to a high of $108,268.
Disclaimer
This information is for general knowledge only and should not be considered investment advice. Always conduct your own thorough research before making any investment decisions.
