Cryptocurrencies fell on Friday even after President Donald Trump signed an executive order creating a strategic bitcoin reserve for the United States.
The reserve will include coins already owned by the government, and the order did not specify a buying schedule or strategy for bitcoin, disappointing some in the market who’d hoped for a more aggressive plan.
The price of bitcoin
EtherXRPSOLADApreviously named these tokens in a social media post teasing details of the “crypto reserve” on Sunday, but they were not specifically named in Thursday’s executive order.
“Although the price has partially recovered, the lack of new demand and uncertainty about future government actions are preventing a significant rally, with prices likely to stabilize in the near to medium term unless a new catalyst emerges,” said Rachel Lin, CEO co-founder of decentralized exchange SynFutures.
White House crypto and AI czar David Sacks detailed in a post on X that the bitcoin reserve will include coins already owned by the U.S. government that it seized from past law enforcement actions – a move, he emphasized, that will “not cost taxpayers a dime.” The U.S. currently owns more than 198,000 bitcoins worth about $17 billion, according to Arkham.
The stockpile of other coins will include “digital assets other than bitcoin forfeited in criminal or civil proceedings.” Sacks said the government will not acquire additional assets for it “beyond those obtained through forfeiture proceedings.” Arkham data shows the U.S. government owns about 56 ether tokens worth almost $119 million. The data does not list XRP or the Solana or Cardano tokens.
Investors initially dumped their coins at the notion of the U.S. having no immediate planned purchases of bitcoin, against the backdrop of major weakness in equities.
“It is good news, but not what the market wanted in the short term,” Steven Lubka, head of private clients and family offices at Swan Bitcoin, said of the initial sell-off. “People were hoping for near-term buy pressure.”
The order does instruct the secretaries of Treasury and Commerce to authorize the development of “budget-neutral strategies for acquiring additional bitcoin, provided that those strategies have no incremental costs on American taxpayers,” and says there’s no plan to accumulate additional assets for the crypto stockpile beyond what’s already been obtained by the government.
“This is not the aggressive bitcoin reserve some were pressing for,” TD Cowen’s Jaret Seiberg said in a note Friday. “Instead, the government is simply keeping crypto rather than immediately turning it into cash. Though limited, this is positive for crypto by signifying White House support for digital assets.”
He also noted Treasury has 60 days to determine if legislation is required to operationalize any part of the order.
Treasury Secretary Scott Bessent emphasized the need for the U.S. to stop selling its bitcoin holdings before exploring potential accumulation plans, speaking on CNBC’s “Squawk Box” Friday.
“I am a big proponent of the U.S. taking the worldwide lead in crypto,” Bessent said. “The first step is to stop selling, and then we’re going to put a plan in place from there. We’re having this Crypto Summit … this afternoon, and then we’ll talk about the way forward.”
The announcement came days after Trump pre-announced the highly anticipated bitcoin reserve that had become one of his biggest promises to the crypto industry on his campaign trail, and on the eve of the first White House Crypto Summit.
The crypto market has been rocked this week by the tariff war and inflation concerns, which have largely overshadowed the speculative excitement around the bitcoin reserve. JPMorgan on Wednesday said it doesn’t expect a big move higher in crypto in the near term, given the broader economic uncertainty and weakening demand.
Bitcoin briefly returned to the key $90,000 level earlier this week and is now hovering just below it. Investors and analysts have warned that until bitcoin can meaningfully hold above it, it’s at risk of a bigger pullback toward $70,000.
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