The crypto market continues to bleed as traders reassess the impact of trade tensions on global economic activity and President Donald Trump’s Bitcoin Reserve order.
Bitcoin has dipped 4.8% to $81,729 while Ethereum is down 8%, hovering just above November 2023 prices near $2,000. Dogecoin leads losses among the top 10 cryptos, down about 13% to $0.16.
That’s despite Trump signing an Executive Order on Thursday, officially establishing the Strategic Bitcoin Reserve and authorizing the creation of a digital asset stockpile.
“The knee-jerk reaction lower likely stems from the realization that no actual budget has been allocated for Bitcoin purchases in the near term,” Singapore-based digital asset trading firm QCP Capital wrote in a recent note.
Indeed, the order directs the Secretaries of Treasury and Commerce to develop “budget-neutral" strategies for acquiring additional Bitcoin but stops short of utilizing taxpayer funds to conduct spot purchases.
That appears to have rubbed investors the wrong way, according to David Lawant, head of research at FalconX.
“Bitcoin tumbled about 5% immediately following the announcement before partially recouping most of the losses, reflecting short-term expectations that the U.S. government will not be immediately committing to acquiring crypto assets in the open market,” he wrote Friday.
Still, some industry analysts see the move as a significant milestone for Bitcoin’s institutional acceptance.
The executive order establishes a Bitcoin Strategic Reserve, separate from the Digital Asset Stockpile comprising a basket of altcoins, including Ethereum.
The reserve is expected to be seeded with Bitcoin seized through criminal and civil asset forfeitures, though it's unclear how much will ultimately be allocated.
U.S. government wallets hold approximately 198,000 BTC (worth about $16.1 billion at current prices), according to Arkham Intelligence.
However, some of those holdings stem from exchange hacks and may not be available for the reserve if returned to prior owners.
The order also mandates a 60-day Treasury review of legal and investment considerations for the reserve, while Treasury and Commerce must explore ways to acquire more Bitcoin without impacting the federal budget or costing taxpayers.
Potential solutions include reallocating a portion of U.S. gold reserves or tapping into the Exchange Stabilization Fund.
“The industry reaction to the order is almost universally positive,” Lawant wrote, adding that the move sets a precedent for sovereign Bitcoin adoption.
A key question now is whether Congress will take action to formalize a long-term BTC acquisition strategy.
While an executive order sets policy, legislation could make Bitcoin holdings a more permanent fixture of U.S. financial reserves.
The Bitcoin for America event on March 11, hosted by Senator Cynthia Lummis and the Bitcoin Policy Institute, is expected to shape further discussions on legislative involvement.
Until then, traders appear to be demanding further clarity on regulation as they also weigh the broader impact of Trump’s trade tariffs, which have rattled global markets and pressured risk assets, including crypto.
