Bitcoin falls over 5% after Trump signs order for strategic bitcoin reserve

Bitcoin prices tumbled over 5% on Thursday after U.S. President Donald Trump signed an executive order to establish a strategic bitcoin reserve. The move, announced just a day before Trump was set to meet top cryptocurrency executives at the White House, introduced fresh uncertainty into the market.

According to White House crypto advisor David Sacks, the reserve will be built using bitcoin already in U.S. government possession—primarily assets seized in criminal and civil forfeiture cases. However, specifics regarding its operation, long-term objectives, or potential benefits for taxpayers remain unclear.

Following the announcement, Bitcoin dropped 5.2%, trading at $84,838.57. Analysts suggest that the lack of clarity surrounding the reserve's management and purpose contributed to the price decline. Some crypto proponents, however, believe the initiative could ultimately stabilize the market by positioning Bitcoin as a long-term store of value.

Trump is expected to formally introduce the strategic bitcoin reserve during a White House crypto summit on Friday. Reports indicate that the reserve will include five digital assets: Bitcoin, Ethereum, XRP, Solana, and Cardano.

Sacks has compared the reserve to Fort Knox, describing Bitcoin as "digital gold" and stating that the government-held cryptocurrency would not be sold. However, concerns remain over the reserve’s governance, with many questioning how it will be managed and whether it will genuinely benefit taxpayers.

Trump’s pro-crypto stance has been widely welcomed by industry stakeholders, particularly after crypto firms poured millions into supporting his and other Republican campaigns ahead of the upcoming elections. However, the move has also sparked debate within conservative circles, with some critics arguing that it may serve the interests of wealthy investors rather than the broader economy.

Sacks estimates that the U.S. government currently holds approximately 200,000 Bitcoin. He claims that previous sell-offs have cost taxpayers $17 billion, though the basis for this calculation remains unclear.

Adding to the controversy, reports suggest that Trump’s family has launched its own cryptocurrency-related ventures, including meme coins, while the president allegedly holds a stake in World Liberty Financial, a crypto platform. While Trump’s aides insist he no longer manages his business interests, external ethics lawyers are reviewing the matter, according to sources.