Bitcoin Drops as Trump’s Crypto Reserve Fails to Impress

Bitcoin fell 4.8% on Friday, sliding to $88,296.5 by 00:46 ET (05:46 GMT) as investor enthusiasm waned following U.S. President Donald Trump’s unveiling of a strategic reserve for cryptocurrency. The announcement, which came shortly after Trump’s crypto czar, David Sacks, outlined plans for the reserve, failed to spark significant market cheer because it did not involve any government-funded purchases of digital assets.

While the reserve concept was initially met with a sharp rally, Bitcoin later pared much of those gains, trading near its recent lows. Broad crypto market sentiment was dampened, with major altcoins such as Solana, Ether, Cardano, and XRP—which are slated to be included in the proposed reserve—showing only minimal recovery.

The strategic reserve will be built exclusively from Bitcoin seized by the federal government in criminal or civil actions. According to Sacks, Trump signed an executive order on Thursday evening to form the reserve. The order also directed the government to refrain from selling its crypto holdings, thereby keeping the seized Bitcoins as a store of value, and mandated an audit of these holdings. The U.S. government currently holds around 200,000 Bitcoins accumulated over the past 15 years.

In addition, Sacks mentioned that Trump has authorized his commerce and Treasury secretaries to explore “budget-neutral” purchases of Bitcoin. However, details on how such purchases would be executed remain unclear. Analysts argue that, while the initiative represents a step toward greater government recognition of digital assets, the absence of new crypto acquisitions limits its immediate market impact.

Market participants now turn their attention to Trump’s upcoming White House Crypto Summit later on Friday, where additional details on his administration’s crypto policy could provide further direction for the digital asset market.