Bitcoin prices drop as Trump's crypto reserve plan disappoints
What's the story
Cryptocurrency values plunged on Thursday, a day after President Donald Trump announced a strategic Bitcoin reserve for the United States. The price of Bitcoin fell 3% to $87,586 according to Coin Metrics, and further dropped to $84,688.13 after the news broke. Other cryptocurrencies, which had initially surged earlier this week following Trump's announcement, also witnessed losses.
Market reaction
Cryptocurrencies experience a downturn
The cryptocurrency market took a hit with Ether down by 2% trading at $2,184.08. XRP and Solana's SOL token fell by 1% and 3%, respectively while Cardano's ADA token fell sharply by 13%. The fall in prices was attributed to the absence of immediate plans for Bitcoin purchases according to Trump's executive order amid an overall weak stock market situation.
Reserve formation
Strategic Bitcoin reserve details revealed
White House crypto and AI czar David Sacks revealed on X that the strategic crypto reserve would be made up of Bitcoins already owned by the US government from previous law enforcement actions. This would not cost taxpayers a dime. The US currently holds over 198,000 Bitcoins worth around $17 billion, according to Arkham data.
Asset inclusion
Other digital assets included in the stockpile
The strategic reserve will also include "digital assets other than Bitcoin forfeited in criminal or civil proceedings." Sacks clarified that the government wouldn't acquire additional assets for it beyond those obtained through forfeiture proceedings. According to Arkham data, the US government currently possesses about 56 ether tokens worth nearly $119 million but doesn't include XRP or Solana or Cardano tokens. The crypto market has also been rattled this week by fears of inflation and a tariff war.