Bitcoin Struggles to Maintain Gains as U.S. Crypto Reserve Lacks Immediate Impact
Bitcoin prices remained relatively unchanged early Friday after a sharp decline on Thursday, triggered by President Donald Trump’s announcement of a strategic Bitcoin reserve and a separate digital asset stockpile.
As of 04:58 a.m. ET, Bitcoin was valued at $88,949.16, according to Coin Metrics.
Bitcoin initially dropped to $84,688.13 after news of the reserve surfaced on Thursday. Other cryptocurrencies, including Ether, XRP, and Solana’s SOL, also declined but started to stabilize by Friday.
White House crypto advisor David Sacks clarified that the Bitcoin reserve consists of BTC already confiscated by the U.S. government through law enforcement actions, ensuring no taxpayer funds are needed. Reports from Arkham estimate that the U.S. holds more than 198,000 bitcoins, valued at approximately $17 billion.
Meanwhile, the digital asset stockpile will consist of various cryptocurrencies seized in legal proceedings, with no plans for additional acquisitions. Government records indicate ownership of around 56 ether tokens worth approximately $119 million but no holdings in XRP, Solana, or Cardano.
Traders had anticipated an immediate market boost
Traders had anticipated an immediate market boost from government Bitcoin purchases, and the lack of such action led to disappointment. “While this is a positive move, the market expected direct buying pressure,” said Steven Lubka of Swan Bitcoin.
The executive order grants the Treasury and Commerce Departments the authority to explore budget-neutral ways of increasing BTC holdings, though there is no concrete plan to do so.
The announcement, made just ahead of the White House Crypto Summit, was overshadowed by broader concerns such as inflation and trade conflicts. JPMorgan analysts indicated that they do not expect a significant crypto rally in the near future due to economic uncertainty.
Bitcoin briefly touched the $90,000 mark earlier in the week but now remains below that level. Analysts caution that a failure to maintain this position could lead to further declines toward $70,000.
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