Bitcoin Plunges... US Strategic Reserve News, Investors 'Disappointed' as Reality Falls Short of Expectations

President Trump Signs Executive Order for 'Bitcoin Strategic Reserve'

Confiscated Bitcoin Converted to Reserves... No Additional Purchases

Bitcoin Plunges in Disappointment... Down to $85,000 Range

"Reduced Selling Pressure... Positive in the Long Term"

U.S. President Donald Trump has signed an executive order to establish a 'Strategic Bitcoin Reserve.' This officially incorporates Bitcoin (BTC) held by the U.S. government as a strategic reserve asset.

On the 6th (local time), David Sacks, the White House AI and Digital Assets (cryptocurrency) Czar, announced via X (formerly Twitter), "Today, President Trump signed an executive order for the strategic reserve of Bitcoin," adding that "this measure reaffirms the President's commitment to making the United States the 'world capital of digital assets.'"

Under this executive order, the U.S. federal government will convert Bitcoin seized through criminal and civil forfeiture procedures into a separate strategic reserve. However, the plan is to increase government Bitcoin holdings without additional purchases. The U.S. government is estimated to currently hold approximately 200,000 bitcoins. However, since there has never been an official audit, a formal accounting procedure for digital assets held by the U.S. government will be conducted.

This strategic Bitcoin reserve will operate similarly to a digital vault. The reserved Bitcoin will not be sold but maintained as a long-term store of value. Czar Sacks explained, "The government has already cost American taxpayers more than $17 billion in losses by hastily selling Bitcoin in the past," adding that "this measure establishes a strategy to maximize the value of government-held assets."

In addition to Bitcoin, a 'U.S. Digital Asset Stockpile' will be established to store other confiscated digital assets. The government plans to include only seized assets in the stockpile without additional purchases, with the U.S. Treasury Department responsible for management and operations. Furthermore, the Treasury and Commerce Departments have been authorized to develop strategies for acquiring additional Bitcoin in a budget-neutral manner. This means Bitcoin holdings can only be expanded under the condition that new purchases do not create additional burdens for American taxpayers.

The market expressed disappointment with this executive order. There had been expectations that if the U.S. designated Bitcoin as a strategic reserve asset, the government would make additional purchases, but the measure only converted existing confiscated quantities.

Indeed, Bitcoin, which had been trading above $90,000, plunged immediately after news of the executive order signing, falling to the $85,000 range. As of 12:27 PM today, Bitcoin is trading at $87,452 on the Binance Tether (USDT) market, down 4.63% from the previous day.

Kim Byung-jun, a researcher at Dispread, analyzed, "The executive order confirmed the U.S. government's policy not to use tax money to increase Bitcoin holdings," adding, "Investors who expected aggressive purchasing policies from the government seem to have turned to selling out of disappointment."

He continued, "This executive order is unlikely to have a positive impact on Bitcoin's price in the short term," but added, "In the long term, however, it is positive in that it can alleviate market concerns that the U.S. government might sell its Bitcoin holdings."

Conor Grogan, former head of product strategy and business operations at Coinbase, said via X on the 7th (local time), "According to my estimates, the U.S. government holds 1,981,090 BTC," adding that "President Donald Trump's Bitcoin reserve executive order could remove $18 billion worth of selling pressure."