Crypto Market Stabilizes After Sharp Drop on U.S. Bitcoin Reserve News
After a turbulent Thursday, the cryptocurrency market held steady on Friday following President Donald Trump’s executive order establishing a strategic Bitcoin reserve and a digital asset stockpile for the U.S.
Bitcoin was last seen trading at $88,949.16 at 04:58 a.m. ET, according to Coin Metrics.
Following the reserve announcement, Bitcoin briefly dropped to $84,688.13. Other cryptocurrencies, including Ether, XRP, and Solana’s SOL, also experienced losses but started recovering.
White House’s crypto and AI lead
David Sacks, the White House’s crypto and AI lead, confirmed that the Bitcoin reserve will contain only BTC already confiscated by the government through law enforcement actions, ensuring taxpayers are not affected. Arkham data estimates that the U.S. government currently holds over 198,000 bitcoins, worth about $17 billion.
The separate stockpile of digital assets will consist of cryptocurrencies forfeited in criminal and civil cases, with no intention of acquiring additional assets beyond what is obtained through legal actions. Government records indicate ownership of approximately 56 ether tokens valued at $119 million, but no known holdings of XRP, Solana, or Cardano.
Traders had anticipated a more direct intervention
Traders had anticipated a more direct intervention in the market, leading to disappointment. “The market was expecting some immediate government purchasing, but that didn’t happen,” noted Steven Lubka of Swan Bitcoin.
While the order allows for budget-neutral strategies to accumulate more Bitcoin, no concrete plans have been announced.
The timing of the announcement, coming before the White House Crypto Summit, was overshadowed by economic uncertainties. JPMorgan analysts remain cautious, stating that they do not expect significant crypto rallies in the near term due to broader economic challenges.
Bitcoin briefly touched $90,000 earlier in the week but now sits below that level. Analysts warn that unless it maintains a strong hold above $90,000, it risks falling toward $70,000.
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