US Bitcoin reserve ups volatility, futures recoil

Bitcoin’s latest volatility spike followed US President Donald Trump’s recent executive order aimed at establishing a Strategic Bitcoin Reserve, igniting a mixed reaction within the trading community. Market observers noted that many traders had expected a more robust initiative involving the direct purchase of Bitcoin using federal funds, leading to a sense of disappointment after the announcement.

The response from the market pointed to unmet expectations. Theodore Agranat, director of Web3 at Gunzilla Games, articulated that traders were hoping for a more aggressive acquisition strategy. “The executive order did not meet market expectations because it failed to announce any new purchases, which many had hoped for,” Agranat noted, emphasizing that the order primarily focused on utilizing confiscated tokens rather than initiating fresh government purchases.

As a result of the lack of anticipated action, Bitcoin’s price fell approximately 2% shortly after the announcement. Simultaneously, Bitcoin’s 24-hour average true range—a key measure of market volatility—surged past 5,000 for the first time in this market cycle, indicating the heightened uncertainty among traders.

In addition to the immediate price drop, Bitcoin futures reflected a bearish sentiment, with the Chicago Mercantile Exchange (CME) reporting declines of about 2% across most contracts on the forward curve which encompasses futures contracts expiring at various dates. Notably, the futures price for July 2025 saw a drop exceeding 4%, further evidencing a cooling market outlook in the medium term.

Trump’s order, signed on March 6, formally established the Strategic Bitcoin Reserve alongside a separate US Digital Asset Stockpile meant to hold other cryptocurrencies. Initially, these reserves will consist solely of assets obtained through law enforcement actions and legal proceedings, rather than representing a proactive purchase strategy by the federal government.

While the executive order emphasized a need for budget-neutral strategies for further Bitcoin acquisition—explicitly stating no additional cryptocurrencies would be acquired irrespective of future conditions—it failed to excite markets looking for substantive financial tactics. Katalin Tischhauser, head of research at Sygnum, highlighted that the market’s perplexity stems from a misunderstanding of the constitutional powers at play; she remarked that congressional authorization would be necessary for any direct government acquisition of Bitcoin.

Moving forward, the implications of this executive order will rest on the specific makeup and management of the Strategic Bitcoin Reserve. Syracuse University professor Cristiano Bellavitis cautioned that the longer-term effects hinge on the reserve’s size and the combination of cryptocurrencies included. “It’s unclear if or how much the US government would invest in crypto,” he stated, suggesting a possibility that if investment were to amount to billions, the resultant price impact could be significant.

This nuanced landscape of cryptocurrency regulation continues to evolve, alongside a proactive and sometimes skeptical trading community that is ever watchful of government actions impacting the digital asset economy.