Bitcoin Price Today: Drops to $89K as Trump Reserve Plan Fails to Spark Excitement
Investing.com - Bitcoin fell sharply on Friday after US President Donald Trump announced a strategic cryptocurrency reserve plan, but the news did not bring much excitement to the market as it did not include new digital asset purchases from the government.
However, Bitcoin recovered some of its early losses as analysts said the reserve plan is still a positive sign for the future of the cryptocurrency market.
Other cryptocurrencies also fell, with Solana, Ether, Cardano, and XRP - digital assets expected to be part of Trump's digital asset reserve - all posting little growth.
Bitcoin fell 2.5% to $89,150 by 05:11 ET (10:11 GMT). Bitcoin had previously bottomed at $84,000 shortly after Trump’s crypto adviser David Sacks revealed plans for a strategic reserve.
Trump signs Bitcoin reserve order
President Trump signed an executive order on Thursday evening establishing a strategic Bitcoin reserve, David Sacks said on social media.
The reserve will only include Bitcoin seized by the federal government in criminal and civil cases, and will not require the government to buy additional cryptocurrencies. However, the government will not sell any of that Bitcoin and will retain it for use as a store of value.
The government currently holds about 200,000 Bitcoins that were seized over the past 15 years, and Trump’s order also calls for an audit of these digital asset holdings. The Justice Department, which oversees the seized Bitcoins, has been selling them off in batches in recent years.
Market Reacts to Bitcoin Reserve Plan
While the move marks a step forward in the US government’s recognition of digital assets, the lack of new government purchases has left the market reacting with hesitation.
Andri Fauzan Adziima, head of research at exchange Bitrue, told Investing.com: “Many expected Trump to introduce a more direct Bitcoin policy, such as buying BTC, but that just created more uncertainty.”
Adziima stressed that until more details emerge about how the government will manage its Bitcoin holdings, market sentiment is likely to remain cautious.
The focus is now on the White House’s crypto summit, scheduled for later Friday.
TD Cowen Analysts: Trump's Crypto Reserve Is a Positive Sign
While Trump's executive order falls short of expectations for a robust Bitcoin reserve, the move still demonstrates the White House's support for digital assets, according to TD Cowen analysts.
"We view this as a compromise. The government is not spending money to buy more digital assets, but simply not selling the assets it has seized," TD Cowen said.
The analysts noted that this Bitcoin reserve could reduce the government's revenue from selling Bitcoin, but they do not believe the move will face strong opposition from lawmakers.
Altcoins Fall Along With Bitcoin
Other cryptocurrencies also fell along with Bitcoin following news of Trump's plan to stockpile digital assets. Ether – the world’s second-largest cryptocurrency – fell 4% to $2,194.26, while XRP remained flat at $2.5458.
Cardano fell a sharp 8% and Solana also fell 3.9%.
Among meme tokens, Dogecoin fell 3.6% and $TRUMP fell 3.8%.