Why the Market Isn’t Reacting to the US Strategic Bitcoin Reserve

Cryptocurrencies Fall Thursday Evening After Trump Signs Executive Order for Bitcoin Reserve

Cryptocurrencies are trading lower Thursday evening after President Donald Trump signed an executive order to create a strategic Bitcoin reserve for the United States and, separately, a “reserve of digital assets.”

Initially, investors sold off their crypto holdings due to the fact that, according to the order, the U.S. has no immediate plans to purchase Bitcoin, against the backdrop of significant weakness in the stock markets.

David Sachs, who is responsible for crypto and artificial intelligence at the White House, clarified in a post on X that the Bitcoin reserve will include Bitcoin already owned by the U.S. government, which had been seized in previous law enforcement actions – a move he emphasized would not “cost taxpayers a penny.” According to Arkham data, the U.S. currently holds over 198,000 Bitcoins valued at approximately $17 billion.

The reserve of other crypto assets will include “digital assets other than Bitcoin that have been seized in criminal or civil proceedings.” Sachs stated that the government will not be acquiring additional assets for it “other than those obtained through confiscation procedures.” Arkham data shows that the U.S. government holds around 56 Ether tokens, valued at nearly $119 million. XRP, Solana, and Cardano tokens are not included in the list.

Investors initially sold off their crypto assets due to the fact that, according to the executive order, the U.S. has no immediate plans for Bitcoin purchases, amid significant weakness in the stock markets.

“This is good news, but not what the market wanted in the short term,” said Stephen Lubka, head of the private client division at Swan Bitcoin. “People were hoping for more immediate buying pressure.”

Sachs noted that the Treasury and Commerce ministers are authorized to develop “budget-neutral strategies for acquiring additional Bitcoin, provided these strategies do not incur additional costs to American taxpayers,” and that there are no plans to accumulate new assets for the crypto reserve other than those already acquired by the government.

The news came just days after Trump hinted at more details about the long-awaited Bitcoin reserve – one of his key commitments to the crypto industry during his presidential campaign – and on the eve of the first White House Crypto Summit.

This week, the crypto market has been shaken by the trade war and concerns over inflation, overshadowing speculative enthusiasm around the Bitcoin reserve. On Wednesday, JPMorgan stated that it does not expect significant price increases in crypto in the near future, given the overall economic uncertainty and weakening demand.