Bitcoin dropped 5%, falling from $90,400 to $84,979, after Donald Trump’s plan for a Strategic Bitcoin Reserve disappointed investors. The reserve will only use Bitcoin seized from criminal cases, with no new Bitcoin purchases planned.
Market enthusiasts had expected the government to purchase more Bitcoin, but the plan, revealed by Trump’s crypto czar David Sacks, disappointed investors.
Sacks clarified on X that the reserve would only use Bitcoin already held by the US from criminal cases, with no new acquisitions planned—at least not in the immediate future.
The news had a ripple effect across the crypto market, dragging down major altcoins. Ether (ETH) dropped 6.23%, XRP fell 7%, Solana (SOL) decreased by 5.01%, and Cardano (ADA) slumped by 9%.
The lack of a clear funding strategy for the reserve, other than existing Bitcoin holdings from forfeited assets, sparked concerns among investors, as noted by trading resource The Kobeissi Letter.
Market leaders show positive attitudes despite the initial negative market response. Electric Capital CEO Avichal showed surprise about market negativity toward the Bitcoin reserve, but crypto trader Ash Crypto sees it as a move toward more Bitcoin adoption.
The CEO of Satoshi Action Fund, Dennis Porter, stated that additional Bitcoin acquisitions will occur in the future to support a sustained optimistic market view for Bitcoin.
The Bitcoin reserve marks an important milestone in institutional Bitcoin adoption, which may lead to higher global acceptance of the cryptocurrency.
Also Read: Trump Signs Order to Create U.S. Strategic Bitcoin Reserve
