Bitcoin fell after US President Donald’s executive order disappointed markets. The decline in cryptocurrencies mirrors the downtrend in the US stock markets amid fears of a widening global trade war.
ADVERTISEMENTUS President Donald Trump signed an executive order to establish a Strategic Bitcoin Reserve on Thursday, according to the White House Crypto and AI czar David Sacks, in a post on X.
The move marks a major policy fulfillment by the US president, aligning with his campaign pledge to “make America the crypto capital of the world.”
Markets disappointed by Trump’s order
Despite initial anticipation, the announcement failed to provide Bitcoin with a significant boost. Bitcoin’s price fell from above $90,000 (€83,290) to about $84,600 (€78,300) initially before rebounding to around $87,000 (€80,520) at 5 am CET.
The order disappointed crypto enthusiasts as Sacks said in the post that the Reserve would be capitalised with Bitcoin owned by the federal government from criminal and civil forfeiture cases, and taxpayer money would not be used to acquire cryptocurrencies. “The government will not acquire additional assets for the Stockpile beyond those obtained through forfeiture proceedings,” he stated.
The statement also emphasised that the government will retain its existing 200,000 bitcoin holdings as a store of value:“ The US will not sell any bitcoin deposited into the Reserve. It will be kept as a store of value,” and “Premature sales of bitcoin have already cost U.S. taxpayers over $17 billion in lost value. Now the federal government will have a strategy to maximize the value of its holdings.”
Trump’s order also includes the establishment of a US Digital Asset Stockpile, “consisting of digital assets other than Bitcoin forfeited in criminal or civil proceedings.”
Bitcoin’s correlation with risk asset
Bitcoin surged last Sunday after Trump announced on the Truth Social that he would direct the Presidential Working Group to move forward on a Crypto Strategic Reserve that includes five digital tokens including Bitcoin, Ethereum, XPR, Solana, and Cardano. The post caused a short-lived rally in these cryptocurrencies, with Bitcoin rising to above $94,000 (€87,000) from about $86,000 (€79,600). However, the gains were erased the following day after Trump confirmed a 25% tariff on Canada and Mexico, along with an additional 10% levy on Chinese imports.
Bitcoin has been in a retreat after hitting a new-time high of above $109,000 (€100,88) on 20 January, the day of Trump’s inauguration. The world’s largest cryptocurrency fell below $80,000 (€74,000) on 28 February, the lowest since November 2024, posting the worst month in three years.
The downtrend mirrored the broad selloff in the US stock markets as Trump’s tariffs spooked investors with fears of a widening global trade war, which will significantly slow down economic growth.
Cryptocurrencies typically trade in tandem with traditional risk assets, particularly US technology stocks. Bitcoin is down 6% this year, closely aligning with the tech-heavily weighed index, Nasdaq’s 6.4% year-to-date decline.
“Thus far this year, Bitcoin has proven more reactive to macroeconomic trends, including trade wars and interest rate trends. With large Wall Street firms now exposed to the coin, it is more susceptible to significant liquidity flows, thus contributing to its volatility,” Uldis Teraudklans, Chief Revenue Officer at Paybis wrote in a note.
