Trump’s Strategic Bitcoin Reserve Removes $17B in Potential Selling Pressure From BTC, Experts Share Views

U.S. President Donald Trump’s recent executive order has sent ripples through the cryptocurrency market by establishing a strategic bitcoin reserve. This move aims to include the 198,000 bitcoins currently held by the U.S. government, obtained through law enforcement actions, which translates to a staggering value of approximately $17.3 billion. White House crypto and AI czar David Sacks emphasized that the government will not utilize taxpayer money to purchase bitcoin or other cryptocurrencies but will rely solely on seized assets.

By designating these bitcoins as a reserve asset, the U.S. effectively removes over $17 billion of potential selling pressure from the market. However, shortly after the announcement, bitcoin experienced a drop to lows around $84,700, indicating investor disappointment regarding the lack of new bitcoin acquisitions by the government. As sentiment began to shift, the price rebounded to $87,600 amid hopes that a crypto tax policy announcement might emerge from the follow-up crypto summit at the White House.

Market analysts provided their perspectives on the implications of this executive order. Valentin Fournier, an analyst at BRN, noted the order’s shortcomings, stating, "The Executive Order has disappointed some investors, as it explicitly states that the government will not acquire additional assets beyond those obtained through forfeitures." He highlighted the confusion surrounding the absence of a clear acquisition strategy and the subsequent impact on market sentiment, leading to a 4% daily decline across major cryptocurrencies, including Bitcoin, Ethereum, and Solana.

Adding a layer of optimism, Dick Lo, CEO of TDX Strategies, saw potential in the Commerce Secretary Howard Lutnick’s upcoming budget-neutral strategy for acquiring additional bitcoins. Given Lutnick’s strong ties with Bitcoin through his association with MicroStrategy, Lo suggested that this may hint at a covert accumulation strategy that could energize the market.

Andrew O’Neill, the Digital Assets Managing Director at S&P Global Ratings, characterized the executive order as primarily symbolic. He observed that for the first time, bitcoin is recognized as a reserve asset by the U.S. government, albeit limited to existing holdings. O’Neill further detailed that any additional bitcoin acquisitions would require a budget-neutral approach, leaving uncertainty regarding the amount and timeline of future purchases.

In the wake of these developments, market dynamics are shifting. According to Jeff Anderson, head of Asia at STS Digital, the market is adjusting its expectations now that the U.S. government will not actively purchase new bitcoins, reflected in a decrease in the 30-day implied volatility index.

As the cryptocurrency landscape evolves under this new executive order, industry experts continue to analyze how these policies will shape the future trajectory of digital assets. The anticipated crypto summit may introduce further clarifications or favorable tax treatments, providing the potential to reshape investment sentiment once again.