Bitcoin slid 4.5% on Friday after President Donald Trump signed an executive order establishing a strategic Bitcoin reserve, a historic but largely symbolic move that failed to excite traders.
The market reaction suggests a classic “sell the news” event, where investors took profits following the widely anticipated announcement.
Despite the dip, Bitcoin remained up nearly 10% over the past week, last trading around $88,096. Meanwhile, Ether dropped 6.2% to $2,171 and Solana shed nearly 5%, signaling broader market unease.
White House crypto and AI czar David Sacks said the reserve will be funded with Bitcoin already owned by the federal government. The holdings are estimated at 200,000 BTC. The executive order commits the US to hold these assets indefinitely without selling them.
Further, the order allows for acquiring more Bitcoin. However, it provides no clear timeline, budget or purchase commitments. Market analysts say this lack of clarity contributed to the sell-off.
Bitcoin Reserve Lacks Concrete Details, Leaving Investors Unimpressed
Andrew O’Neill, digital assets managing director at S&P Global Ratings, noted that the move merely formally recognizes Bitcoin as a reserve asset for the first time.
“The significance of this executive order is mainly symbolic,” O’Neill said, “as it marks the first time Bitcoin is formally recognized as a reserve asset of the United States government.”
“There is no indication yet of how much, if any, would be acquired nor a timeline,” he added.
Meanwhile, 10X Research said that expectations were far greater than what was delivered.
“While this marks an initial step, the details fell far short of what many had anticipated. Although additional measures could be announced later, the latest development highlights the significant gap between an ideal scenario and the actual policy rollout,” the firm said.
“While this is progress—formalizing the US government’s indefinite holding of confiscated Bitcoin—there is still no clear guidance on the reserve’s size. Based on our estimates, the actual Bitcoin allocation could be 50% lower than the headlines suggest,” it added.
Further, John Deaton, a well-known cryptocurrency advocate, pointed out that the US government plans to restrict its digital asset reserves—possibly including Bitcoin—to assets seized through legal actions.
Instead of actively buying more, the government may rely solely on cryptocurrencies obtained through criminal or civil forfeiture cases.
$535M in Crypto Positions Get Wiped Out
The announcement triggered a wave of volatility, leading to $535.32 million in liquidations over the past 24 hours, according to CoinGlass data. A total of 153,306 traders were affected.
Long positions took the biggest hit, with $402.72m in losses. Short positions saw $132.59m liquidated.
Bitcoin led the liquidations with $262.49m wiped out. Ethereum followed with $69.50m, while XRP, Solana, Cardano, and Dogecoin saw $24.28m, $21.62m, $18.17m and $12.17m in liquidations, respectively.
Bitcoin led the liquidations with $262.49m, followed by Ethereum ($69.50m), XRP ($24.28m), Solana ($21.62m), Cardano ($18.17m) and Dogecoin ($12.17m).
Some traders expected the executive order to signal aggressive Bitcoin accumulation by the US government. However, the muted response suggests that much of the optimism was already priced in.
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