Investor Sentiment Dampened as Bitcoin Reserve Plan Lacks Direct Purchases
US President Donald Trump’s recent executive order to establish a Strategic Bitcoin Reserve has failed to impress investors, as markets had anticipated a more aggressive stance from the administration.
The order, signed on March 6, mandates the creation of a US Digital Asset Stockpile, capitalized primarily with Bitcoin forfeited through legal proceedings. It also instructs other government agencies to assess their legal authority to contribute additional assets to the reserve. However, the plan does not include government purchases of Bitcoin, a detail that has left traders underwhelmed.
No Direct Bitcoin Purchases Planned
The executive order clarifies that the US government will not allocate taxpayer funds to buy Bitcoin or sell assets held within the reserve. Instead, the Treasury and Commerce Departments have been authorized to explore “budget-neutral strategies” to acquire more Bitcoin, ensuring no additional burden on American taxpayers.
“The Secretaries of Treasury and Commerce are authorized to develop budget-neutral strategies for acquiring additional Bitcoin, provided that those strategies impose no incremental costs on American taxpayers,” the order states.
Market Reaction to Trump’s Crypto Policies
Since Trump issued an earlier executive order on January 23, revoking prior efforts to regulate international digital assets and halting central bank digital currency initiatives, Bitcoin has fallen nearly 20%. As of Tuesday, it was trading at $82,264, significantly lower than its peak earlier this year.
In a separate post on March 3, Trump announced that the administration would also establish a stockpile of XRP, Solana (SOL), and Cardano (ADA), three lesser-known tokens. While the announcement initially spurred price surges, the momentum quickly faded. Solana has since dropped 50%, XRP by 31%, and Cardano by 23%, reflecting the market’s overall lack of enthusiasm.
Why Investors Are Disappointed
Many in the cryptocurrency sector had hoped for a more aggressive approach, including direct government purchases of Bitcoin, which could have driven prices higher and prompted other nations to follow suit. Instead, the initiative merely consolidates digital assets already in government possession, failing to provide the bullish signal many traders had anticipated.
A Strategic Play for the Future
The administration has framed the move as a strategic necessity, emphasizing the importance of securing Bitcoin reserves early due to its limited supply of 21 million tokens.
“There is a strategic advantage to being among the first nations to create a Strategic Bitcoin Reserve,” the fact sheet accompanying the executive order states.
The order also aims to centralize cryptocurrency assets seized by various federal agencies, streamlining their management under a single entity. The administration argues that this will “harness the power of digital assets for national prosperity.”
During his campaign, Trump had pledged to make the US “the crypto capital of the world,” but with market reaction tepid, it remains to be seen whether this initiative will deliver on that promise.
