Bitcoin fell sharply on Friday, dropping 6% to $84,864.3. The decline followed U.S. President Donald Trump’s announcement of a strategic Bitcoin reserve. However, the reserve does not include any government-funded purchases of digital assets, leading to little impact on market support.
On Thursday evening, White House crypto czar David Sacks confirmed that Trump signed an executive order to establish a strategic Bitcoin reserve. Additionally, the order includes a broader digital asset reserve. However, rather than buying new Bitcoin, the reserve will only hold crypto confiscated through criminal and civil proceedings.
Currently, the Department of Justice owns about 200,000 Bitcoins. These holdings are valued at over $17 billion based on current prices. Historically, the government has sold portions of its Bitcoin through Coinbase. With the new order in place, there will be no further government-led crypto sales.
The crypto market reacted negatively to the announcement. Many traders had speculated that Trump’s reserve would involve government-backed Bitcoin purchases. Such a move could have bolstered demand and strengthened market sentiment. However, since no new government buying is planned, the market saw the reserve as lacking real support.
Trump had previously identified five cryptocurrencies for inclusion in his reserve: Bitcoin, Ether, Solana, Cardano, and XRP. Following the news, all five assets experienced significant losses. Ether fell 6%, while XRP, SOL, and ADA dropped between 3.7% and 14%.
Despite the decline, Bitcoin remains resilient. Market watchers will closely follow any new policy shifts or regulatory developments that could influence prices. While Trump’s reserve does not bring direct government support, it highlights growing institutional interest in digital assets.
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Bitcoin drops 6% as Trump’s strategic reserve excludes government purchases. Find out how the market reacted and what’s next.
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