Cryptocurrency is dropping by as much as 6% as government purchase plans are lacking.
US President Donald Trump’s executive order failed to impress the crypto market to establish a stockpile of Bitcoin’s strategic reserves and other digital assets, and Bitcoin’s value plummeted after its announcement.
Bitcoin fell by 6% following Trump’s order on Thursday, but this did not include the government’s plans to actively purchase Bitcoin.
After a low drop of $84,900, the cryptocurrency was trading at around $87,700 at 05:00 GMT.
In a statement announcing the order, Trump’s crypto emperor David Sachs said “strategic Bitcoin reserves” and “digital asset stockpile” will be capitalized with assets confiscated in criminal or civil lawsuits.
“This means taxpayers don’t have to pay a dime,” Sachs said in X.
“It is estimated that the US government owns around 200,000 bitcoins, but there was no full audit. The EO (executive order) directs the full accounting of federal digital asset holdings.”
Sacks said the order is also sought to develop a “budget-neutral strategy to acquire additional bitcoin” for the Treasury and Commerce departments, if it is never free to US taxpayers.
Trump’s order came after repeatedly flagging plans to establish cryptocurrency stockpiles or reserves as part of a pledge to turn the United States into a “planetary crypto capital.”
However, some cryptography enthusiasts were not impressed.
German tech entrepreneur Shayan Salehi explained the announcement that the government would not acquire additional assets as “more famous words than it could unleash the bear market.”
Spencer Hakimian, founder of New York-based Tolou Capital Management, said in an X post along with a screenshot of a graph showing Bitcoin’s fall.
Hakimian said the plan was “very overwhelming.”
“They don’t buy new Bitcoin now unless they can do it in a revenue-neutral way. That’s not to say there’s nothing the federal government does,” he said.
The United States owns an estimated 200,000 Bitcoins seized during criminal and civil confiscation.
Sack suggested that the reserves would work like a “Digital Fort Knox” by helping Bitcoin retain its value.
“Early selling Bitcoin has already lost taxpayer taxes over $17 billion. The federal government now has a strategy to maximize the value of its holdings,” he said.
Sachs said in addition to the Bitcoin Reserve, another stockpile will be established for “non-Bitcoin digital assets confiscated in criminal or civil lawsuits.”
That stockpile may contain tokens such as ether, XRP, Solana, Cardano, and more. This is the asset Trump nominated earlier this week, and was named in a social media post detailing plans for the cryptocurrency reserve.
After Trump was elected in November, Bitcoin’s value skyrocketed, reaching a record peak of $109,071 in mid-January.
His family has accumulated billions of dollars in cryptocurrency in cryptocurrency, including the Trump meme coin, which was released in January, so the president’s support for cryptocurrency is under scrutiny.
Critics of Bitcoin and other cryptocurrency warned that assets lack intrinsic value, equating the rise to the Ponzi scheme.