Cryptocurrency falls as much as 6 percent as lack of plans for government purchases disappoints investors.
United States President Donald Trump’s executive order to establish a Bitcoin strategic reserve and a stockpile of other digital assets has failed to impress crypto markets, with Bitcoin’s value plummeting following the announcement.
Bitcoin fell as much as 6 percent following Trump’s order on Thursday, which did not include plans for the government to actively buy Bitcoin.
After dropping as low as $84,900, the cryptocurrency was trading at about $87,700 as of 05:00 GMT.
In a statement announcing the order, Trump’s crypto tsar David Sacks said the “Strategic Bitcoin Reserve” and “Digital Asset Stockpile” would be capitalised with assets forfeited in criminal or civil proceedings.
“This means it will not cost taxpayers a dime,” Sacks said on X.
“It is estimated that the US government owns about 200,000 Bitcoin; however, there has never been a complete audit. The E.O. (executive order) directs a full accounting of the federal government’s digital asset holdings.”
Sacks said the order also called for the Secretaries of Treasury and Commerce to develop “budget-neutral strategies for acquiring additional Bitcoin” provided they are at no cost to the US taxpayer.
Trump’s order came after he repeatedly flagged plans to establish a cryptocurrency stockpile or reserve as part of his pledge to turn the US into the “crypto capital of the planet”.
Some crypto enthusiasts, however, were less than impressed.
Shayan Salehi, a German tech entrepreneur, described the announcement that the government would not acquire additional assets as “famous words than can unleash a bear market”.
“Market muted,” Spencer Hakimian, the founder of New York-based Tolou Capital Management, said in a post on X alongside a screenshot of a graph showing Bitcoin’s fall.
Hakimian said the plan was “very underwhelming”.
“They will not currently buy any new Bitcoin unless they can do it in a revenue-neutral way. Nothing the federal government does is revenue neutral,” he said.
The US owns an estimated 200,000 Bitcoin seized during criminal and civil forfeiture.
Sacks suggested the reserve would function like a “digital Fort Knox” by helping Bitcoin retain its value.
“Premature sales of Bitcoin have already cost US taxpayers over $17bn in lost value. Now the federal government will have a strategy to maximize the value of its holdings,” he said.
In addition to a Bitcoin reserve, Sacks said a separate stockpile would be established for “digital assets other than Bitcoin forfeited in criminal or civil proceedings”.
That stockpile could include tokens such as ether, XRP, Solana and Cardano – assets named by Trump earlier this week in a social media post detailing his plans for a cryptocurrency reserve.
The value of Bitcoin soared after Trump was elected in November, hitting a record peak of $109,071 in mid-January.
The president’s support for cryptocurrency has come under scrutiny, as his family has amassed billions of dollars in crypto wealth, including through a Trump meme coin launched in January.
Critics of Bitcoin and other cryptocurrencies have warned that the assets have no intrinsic value and likened their rise to a Ponzi scheme.