Only the crypto markets could react so underwhelmingly to one of the most significant announcements this industry has ever seen.
Donald Trump signing an executive order to create a strategic Bitcoin reserve is one of the most consequential milestones in this digital asset’s 15-year history. Yet BTC plunged by $5,000 as policy details emerged.
Why? Because the U.S. won’t be using taxpayer dollars to purchase additional coins on top of the 198,000 BTC already seized from criminals. This lack of buying pressure means we won’t see the “God candle” that traders crave.
The muted market reaction is like a man carrying a prized ham under his arm — but crying because he hasn’t got any bread.
Bitcoiners need to take a moment to reflect on what this policy actually means. The biggest economy in the world has just announced that it’s going to start investing in BTC — one of only a few countries to do so.
Given Trump’s drive to slash federal spending through the Department of Government Efficiency — and Bitcoiner concerns over U.S. debt — it would have been hugely hypocritical for the president to go on a spending spree.
The executive order also leaves the door open to BTC buys through other routes in the future. Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick are being encouraged to find “budget-neutral” ways to add Bitcoin to this new warchest in the future.
On X, JAN3 CEO Samson Mow said this could happen in a plethora of ways. He cited “Bitcoin bonds” as an example, which enables a country to raise funds with the specific intent of buying BTC. Such a policy was touted by El Salvador back in 2023, but has fallen by the wayside as the Central American nation battles with the International Monetary Fund for a $1.4 billion loan.
The ardent Bitcoiner also believes that the Trump administration could push to offload some of America’s vast gold reserves, with estimates suggesting they’re currently worth a cool $760 billion.
Mow went on to argue that the U.S. has just fired the starting gun on an international race to amass Bitcoin, which means other countries will look to create reserves of their own. And as demand rises, he believes Trump “will want to have the most,” meaning additional purchases will be on the cards.
For years now, Bitcoin’s price movements have often been based on “buy the rumor, sell the news.” The markets accelerated when it was confirmed that the Oval Office would have its first pro-crypto president, but cooled and started trading sideways after the inauguration.
What’s more interesting right now is how XRP, Solana and Cardano are faring.
Trump’s executive order also confirmed that a “digital asset stockpile” separate to this strategic Bitcoin reserve will be created. This will consist of altcoins already seized by the U.S. government.
Data from Arkham Intelligence reveals that most of these holdings are concentrated in a few particular coins — $123 million of Ether, $122 million of USDT, and $24 million of Binance Coin.
But XRP, SOL and ADA are nowhere to be found in this wallet — and because no additional purchases beyond forfeited coins are going to be made, they won’t be included in this stockpile… despite the president saying they would be on Truth Social last Sunday.
You’d think each of these three coins would have cratered in reaction to this news, but they haven’t. XRP is down a mere 2.3% at the time of writing, with SOL off 2%. ADA has fallen by 6%, but remains 40% higher than it was a week ago. Is this a sign that market watchers are expecting a “rabbit out of the hat” moment at the White House crypto summit?
Zooming out, it is worth taking stock of the notion that it probably isn’t a good idea for the U.S. government to own so much Bitcoin in the first place. After all, this is a cryptocurrency that was created to serve as an alternative to the existing financial system after the almighty crash of 2007 and 2008. As the analyst Jim Bianco recently told the Schwab Network:
“The production of crypto is decentralized, but the ownership is going to be highly centralized … in a future administration, maybe they’re going to say Bitcoin is against the interest of the dollar, we want its price to go to zero. And they might have the ability by being a big owner of it to do that.”
Food for thought indeed.
Disclaimer: The opinions in this article are the writer’s own and do not necessarily represent the views of Cryptonews.com. This article is meant to provide a broad perspective on its topic and should not be taken as professional advice.
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