Bitcoin Drops as U.S. Reserve Plan Fails to Impress Markets

Crypto Market Dips as Trump’s Bitcoin Reserve Plan Disappoints

Cryptocurrency prices remained stable early Friday following a downturn on Thursday, triggered by President Donald Trump’s executive order establishing a strategic bitcoin reserve for the U.S. and an additional “digital asset stockpile.”

Bitcoin traded at $88,949.16 as of 04:58 a.m. ET, according to Coin Metrics.

After the announcement on Thursday, Bitcoin briefly plummeted to $84,688.13. Other cryptocurrencies that had surged earlier in the week—such as Ether, XRP, and Solana’s SOL—also saw declines, though their losses were slightly mitigated by Friday.

White House crypto and AI advisor David Sacks clarified on X that the reserve would consist of Bitcoin already held by the U.S. government, primarily assets seized through law enforcement actions. He stressed that this initiative would not require taxpayer funding. Current data from Arkham estimates the U.S. holds over 198,000 bitcoins valued at approximately $17 billion.

Meanwhile, the digital asset stockpile will include cryptocurrencies confiscated in legal proceedings, with no additional acquisitions planned beyond these forfeited assets. The government reportedly owns about 56 ether tokens worth nearly $119 million but does not hold XRP, Solana, or Cardano assets, according to Arkham.

Market participants initially reacted negatively to the absence of immediate Bitcoin purchases, given broader economic uncertainties and a weak stock market. “It’s positive news but not what traders were hoping for in the short term,” noted Steven Lubka, head of private clients at Swan Bitcoin.

Although the Secretaries of Treasury and Commerce have been granted authority to explore budget-neutral strategies for acquiring more Bitcoin, there is currently no intention to expand the crypto stockpile beyond assets already in possession.

The announcement coincided with Trump’s recent teaser regarding the anticipated Bitcoin reserve and came just before the first White House Crypto Summit. However, the market has been overshadowed by inflation concerns and ongoing trade tensions, which have dampened speculative enthusiasm. JPMorgan analysts indicated on Wednesday that they do not foresee a significant rally in crypto prices soon due to prevailing economic instability.

Bitcoin briefly tested the $90,000 mark earlier in the week but now hovers just below it. Analysts caution that failure to hold above this level could trigger a more significant retracement toward $70,000.

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