Trump’s Strategic Crypto Reserve Sparks Market Reaction

WASHINGTON, D.C. — Cryptocurrencies remained largely unchanged on Friday following President Donald Trump‘s announcement of a strategic bitcoin reserve for the United States. The reserve will comprise coins already owned by the government, disappointing investors who anticipated a more aggressive purchasing strategy.

On Friday, Bitcoin‘s price hovered at $88,949.16, down approximately 5% after the announcement. Other major cryptocurrencies, including Solana‘s and Cardano‘s tokens, also saw declines as the market reacted to the news.

David Sacks, the White House crypto and AI czar, elaborated that the reserve will include bitcoins seized from past law enforcement actions, emphasizing that this move would result in no cost to taxpayers. The U.S. currently possesses over 198,000 bitcoins valued at about $17 billion, according to Arkham data.

The reserve will also consist of digital assets forfeited in criminal or civil proceedings. However, Sacks clarified that the government would not acquire additional assets beyond those obtained through forfeiture. Arkham’s data reveals the U.S. government holds about 56 ether tokens valued at approximately $119 million.

Market analysts voiced their disappointment with the lack of immediate buying plans for bitcoin. “It is good news, but not what the market wanted in the short term,” said Steven Lubka, head of private clients and family offices at Swan Bitcoin. “People were hoping for near-term buy pressure.”

According to the directive, the Secretaries of Treasury and Commerce are tasked with developing budget-neutral strategies for acquiring more bitcoin, provided these strategies do not impose additional costs on taxpayers. The White House confirmed that no plans exist to accumulate further assets for the crypto reserve beyond what the government already possesses.

TD Cowen‘s Jaret Seiberg noted, “This is not the aggressive bitcoin reserve some were pressing for. Instead, the government is simply keeping crypto rather than immediately turning it into cash.” He pointed out that the Treasury has 60 days to ascertain whether legislation is necessary to implement any part of the order.

This announcement arrived shortly before the first White House Crypto Summit, where Trump had hinted at creating a bitcoin reserve as a key feature during his campaign. Although some investors were rooting for a dramatic increase in the U.S. government’s involvement in the crypto market, the initial market response indicated skepticism.

Market volatility heightened this week amid concerns over ongoing tariff disputes and inflation issues, overshadowing excitement surrounding Trump’s bitcoin reserve. JPMorgan analysts warned of a bleak outlook for cryptocurrencies in light of economic uncertainties and weakening demand.

As the week closed, bitcoin struggled to hold its value around the crucial $90,000 threshold, with analysts predicting a potential drop toward $70,000 if downward momentum continued. Bitcoin is poised to conclude its first full week of March with a 6% increase despite recent fluctuations.