Disappointing Expectations! Trump's Bitcoin Reserve Plan Fails to Boost Market, BTC Price Drops!

TradingKey - The form of Trump's strategic Bitcoin reserve fell short of market expectations, leading to a decline in Bitcoin's price, though industry insiders remain optimistic about its future.  

On Friday, David Sacks, the White House AI and Crypto Czar, revealed that President Trump had signed an executive order to establish a strategic Bitcoin reserve. However, instead of boosting Bitcoin's price, this news caused it to drop nearly 5%, temporarily trading at $85,590.

Bitcoin Price Chart, Source: CoinMarketCap. 

Earlier today, David Sacks posted on social media, "Just minutes ago, President Trump signed an executive order to establish a strategic Bitcoin reserve. The reserve will be capitalized with Bitcoin owned by the federal government, acquired through criminal or civil asset forfeiture proceedings. This means it won't cost taxpayers a single penny."

However, the market had expected the U.S. government to continue purchasing and increasing its Bitcoin holdings, rather than merely converting the nearly 200,000 Bitcoins already held by the government into reserve assets. This indicates no new funds were injected to push Bitcoin's price higher.

Although the move did not drive Bitcoin's price up in the short term, it effectively locks up a significant amount of Bitcoin, reducing selling pressure and benefiting the market in the long run. Conor Grogan, an executive at Coinbase, stated, "This executive order will reduce selling pressure by approximately $18 billion." Matt Hougan, Chief Investment Officer at Bitwise, also commented, "This is extremely bullish for Bitcoin in the long term."