Bitcoin’s price has taken a sharp downturn despite the announcement of a U.S. Strategic Bitcoin Reserve. The flagship cryptocurrency plummeted from $92,000 to below $85,000, marking a 7% drop in the last 24 hours. The broader crypto market followed suit, with major altcoins like Ethereum (ETH), Solana (SOL), and Cardano (ADA) seeing significant losses.
Sell the News Event?
President Donald Trump’s executive order to establish a Bitcoin reserve was expected to be a bullish catalyst. However, the order did not provide a clear roadmap for acquiring additional Bitcoin beyond the government’s existing holdings. This lack of new accumulation plans led to a ‘sell the news’ reaction, triggering a wave of selling pressure across the market.
Economist Peter Schiff weighed in, emphasizing that the executive order confirms the U.S. will only maintain previously seized Bitcoin without plans for further purchases. Schiff noted that no new allocations for altcoins such as ETH, XRP, ADA, or SOL were included, reinforcing bearish sentiment.
While it's up for debate whether the government can buy more Bitcoin for the strategic reserve, the one thing the executive order makes clear is that the crypto stockpile will consist only of seized tokens, so no ETH, XRP, ADA, or SOL will be bought. So at least there's that!
— Peter Schiff (@PeterSchiff) March 7, 2025
Market Uncertainty and Altcoin Declines
After briefly bouncing back to $92,000 earlier this week, Bitcoin’s price dipped again following the White House Crypto Summit discussions. The uncertainty surrounding the strategic reserve’s execution path continues to weigh on investor sentiment. Alongside Bitcoin’s drop, Ethereum fell by 5.83%, Solana by 4.76%, and Cardano by 10.83%. XRP managed to hold relatively well, only slipping 1.34%.
Potential Future Accumulation?
Despite the market downturn, some analysts believe Trump’s executive order paves the way for future Bitcoin accumulation. Metaplanet CEO Simon Gerovich highlighted that the order grants Treasury and Commerce authorities the power to explore budget-neutral methods for increasing reserves. Possible strategies include:
- Utilizing the Exchange Stabilization Fund – This fund holds approximately $39 billion, which could be used to purchase Bitcoin.
- Congressional Approval via the BITCOIN Act – Senator Cynthia Lummis is pushing legislation that would allow the U.S. Treasury to acquire 1,000,000 Bitcoin over five years.
What’s Next for Bitcoin?
While the immediate reaction to the executive order has been bearish, long-term implications remain uncertain. If the U.S. government moves forward with active Bitcoin accumulation, it could fuel renewed bullish momentum. Until then, market volatility is likely to persist as investors weigh the evolving policy landscape.
Also Read: How a Strategic Bitcoin Reserve Could Help Reduce US Debt and Boost Economic Growth
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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