Trump's executive order disappoints crypto enthusiasts - Bitcoin suffers worst month in 3 years!
US President Donald Trump signed an executive order to create a Strategic Bitcoin Reserve on Thursday, according to White House Crypto and AI Czar David Sacks, in a post on X. The move marks a major policy accomplishment by the US president, aligning with his campaign promise to “ make America the crypto capital of the world.”
Despite initial predictions, the announcement failed to give Bitcoin a significant boost. The price of Bitcoin fell from over $90,000 (€83,290) to around $84,600 (€78,300) initially before recovering to around $87,000 (€80,520) at 5am CET.
The order disappointed crypto enthusiasts after Sacks said in the post that the Reserve would be capitalized with Bitcoin owned by the federal government from criminal and civil forfeiture cases and taxpayer money would not be used to purchase cryptocurrencies. “The government will not purchase additional assets for the stock beyond those obtained through forfeiture proceedings, ” he said.
The statement also emphasized that the government will maintain its existing holdings of 200,000 bitcoins as a store of value: “The U.S. will not sell any bitcoins deposited in the Reserve. They will be held as a store of value,” and “ Premature sales of bitcoin have already cost American taxpayers over $17 billion in lost value. Now the federal government will have a strategy to maximize the value of its holdings.”
Trump's order also includes the creation of a US digital asset stockpile, "composed of digital assets other than Bitcoin seized in criminal or civil proceedings."
Bitcoin surged last Sunday after Trump announced on Truth Social that he would lead the Presidential Task Force to move forward on a Strategic Crypto Reserve that includes five digital tokens including Bitcoin, Ethereum, XPR, Solana, and Cardano.
The post sparked a short-lived surge in these cryptocurrencies, with Bitcoin rising to over $94,000 (€87,000) from around $86,000 (€79,600). However, the gains were erased the next day after Trump confirmed a 25% tariff on Canada and Mexico, along with an additional 10% tax on Chinese imports.
Bitcoin has been on a retreat since hitting a new all-time high of over $109,000 (€100.88) on Jan. 20, the day of Trump's inauguration. The world's largest cryptocurrency fell below $80,000 (€74,000) on Feb. 28, its lowest since November 2024, marking its worst month in three years.
The downward trend reflected the broad sell-off in US stock markets as Trump's tariffs spooked investors with fears of an escalating global trade war, which will significantly slow economic growth.
Cryptocurrencies typically trade alongside traditional risk assets, particularly U.S. technology stocks. Bitcoin has fallen 6% this year, closely tracking the tech-heavy Nasdaq index's 6.4% year-to-date decline.
"So far this year, Bitcoin has proven more responsive to macroeconomic trends, including trade wars and interest rate trends. With major Wall Street firms now exposed to the currency, it is more susceptible to significant liquidity flows, thus contributing to its volatility," the experts in the field write.
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