The Bitcoin market is seeing sharp losses as investors respond to mounting economic uncertainty driven by US-led trade tariffs and President Donald Trump’s Bitcoin Reserve order.
Bitcoin dropped 4% on Monday, touching a low of $80,123, while Ether fell over 5%. Other major cryptocurrencies followed suit, with XRP and Solana losing more than 5%. Dogecoin tumbled over 8%.
This sharp sell-off comes despite Trump signing an Executive Order last Thursday, formally establishing the Strategic Bitcoin Reserve—a move initially seen as bullish for digital assets. However, deeper scrutiny of the policy suggests otherwise, contributing to the ongoing market slump.
US Won’t Be Buying Bitcoin—Only Seizing It
At first glance, the creation of a Strategic Bitcoin Reserve seemed like a game-changer for institutional adoption. But the details tell a different story.
David Sacks, the White House Crypto Czar, said on X that the reserve will be built exclusively from Bitcoin seized in criminal and civil forfeiture cases.
“The government will not acquire additional assets for the stockpile beyond those obtained through forfeiture proceedings,” Sacks wrote.
In other words, the US won’t be actively purchasing Bitcoin, eliminating hopes of direct government-driven demand.
Additionally, the order bans the sale of Bitcoin from the reserve, reinforcing the asset’s scarcity narrative. Current estimates suggest the US government holds roughly 200,000 BTC, but it remains unclear how much has been sold off in previous liquidation rounds.
DOJ Bitcoin Sales May Explain Market Volatility, David Bailey Suggests
While this executive order prevents future sales, Bitcoin Magazine CEO David Bailey raised concerns about past government actions.
Bailey suggested that the Department of Justice (DOJ) has been offloading Bitcoin, against the President’s wishes, after receiving court approval in December to liquidate 69,370 BTC seized from the Silk Road marketplace. If these sales continued despite the new reserve order, they could explain some of Bitcoin’s recent price struggles, he suggested.
Further, the White House Crypto Summit on March 7, 2025, had set high expectations for government-led Bitcoin adoption, but the lack of a clear strategy beyond seized assets appears to have disappointed investors.
Trump Trade Tariffs Add Pressure to Bitcoin
Beyond the Bitcoin Reserve order, broader macroeconomic concerns are weighing on the market. The Trump administration’s decision to impose 25% tariffs on Canada and Mexico and 20% on Chinese imports has intensified global trade tensions.
Tariffs have historically fueled inflation, disrupted supply chains, and dampened economic growth, prompting retaliatory measures from affected nations. This uncertainty is spilling over into risk assets, including stocks and cryptocurrencies.
While the suspension of some tariffs could provide temporary relief, investor sentiment remains fragile.
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