Trump Establishes Bitcoin Strategic Reserve, Market Reacts With Decline

President Donald Trump has directed the creation of a Bitcoin Strategic Reserve, storing seized assets in what’s being dubbed a “digital Fort Knox.” This initiative, led by Trump’s crypto czar David Sacks, ensures Bitcoin confiscated through civil and criminal forfeitures is held long-term for value preservation.

In a video signing the order, Trump remarked, “Made the promise, right?” emphasizing his commitment to integrating crypto into national strategy. While the order authorizes government officials to explore ways to grow the reserve, acquisitions must remain budget-neutral, avoiding taxpayer costs. Non-Bitcoin assets seized by the government will also be stockpiled, though no specific cryptocurrencies were named.

Despite the historic move, the market reacted negatively, with Bitcoin dropping nearly 5% to $85,000 amid disappointment that no new government purchases are planned. Ethereum (ETH), Ripple (XRP), Cardano (ADA), and Solana (SOL) also fell 4%-8% following the announcement.

Matt Hougan, CIO of Bitwise Asset Management, sees the reserve as a safeguard against future government crackdowns on Bitcoin, increasing the likelihood of other nations adopting similar reserves. However, Capriole Investments founder Charles Edwards criticized the lack of a direct buying plan, calling the move a “pig in lipstick.”

While this marks a significant step in institutional Bitcoin adoption, the crypto market remains wary of its immediate impact. Investors now await further developments as Trump’s administration shapes its broader digital asset strategy.