Bitcoin Struggles Amid Disappointing U.S. Crypto Reserve Announcement
Cryptocurrency markets showed little movement on Friday after experiencing losses on Thursday, following President Donald Trump’s executive order to establish a national Bitcoin reserve and a separate digital asset stockpile.
At 04:58 a.m. ET, Bitcoin was priced at $88,949.16, according to Coin Metrics.
Shortly after the announcement, Bitcoin’s price dropped to $84,688.13, while other major cryptocurrencies, including Ether, XRP, and Solana’s SOL, also suffered declines but later steadied.
White House crypto policy advisor David Sacks clarified that the Bitcoin reserve would consist of BTC seized by the U.S. government in past law enforcement actions, meaning no taxpayer funds would be used. Data from Arkham suggests that the U.S. government holds over 198,000 bitcoins, worth approximately $17 billion.
The digital asset stockpile will include various cryptocurrencies confiscated in criminal and civil cases. However, the government does not intend to make additional purchases, with current holdings estimated to include 56 ether tokens valued at nearly $119 million, but no XRP, Solana, or Cardano tokens.
Traders were initially optimistic about potential government
Traders were initially optimistic about potential government-driven buy pressure, but the lack of immediate acquisitions led to market disappointment. “While positive in the long run, the market was expecting more immediate buying activity,” said Steven Lubka of Swan Bitcoin.
Although the order allows for the exploration of strategies to expand Bitcoin reserves without incurring extra costs to taxpayers, no plans have been outlined yet.
The timing of the announcement, just before the White House Crypto Summit, was overshadowed by broader economic concerns, such as inflation and trade uncertainties. Analysts from JPMorgan cautioned earlier this week that they do not expect a strong upward movement in crypto due to overall economic instability.
Bitcoin recently tested the $90,000 threshold but remains below it. Experts warn that unless Bitcoin establishes firm support at this level, it risks falling back toward $70,000.
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