Bitcoin Market Reacts Cautiously to U.S. Reserve Plan
The cryptocurrency market remained relatively stable on Friday after a dip on Thursday, triggered by President Donald Trump’s announcement of a Bitcoin reserve and a separate digital asset collection for the U.S.
As of 04:58 a.m. ET, Bitcoin was valued at $88,949.16, according to Coin Metrics.
Bitcoin briefly fell to $84,688.13 following the news, with other major digital assets such as Ether, XRP, and Solana’s SOL also seeing losses before stabilizing.
David Sacks, the White House’s lead on crypto policy, clarified that the Bitcoin reserve would consist solely of BTC confiscated by the government in legal proceedings, ensuring that taxpayer funds would not be involved. Arkham data shows that the U.S. holds roughly 198,000 bitcoins worth an estimated $17 billion.
Meanwhile, the government’s separate digital asset stockpile will contain cryptocurrencies forfeited in criminal and civil cases, but no additional acquisitions are planned. Government records indicate ownership of around 56 ether tokens valued at $119 million, with no known holdings in XRP, Solana, or Cardano.
Market participants were initially disappointed
Market participants were initially disappointed that the government had no immediate plans to buy Bitcoin, given hopes for direct intervention. “Many expected the government to step in as a major buyer, but that didn’t happen,” said Steven Lubka of Swan BTC.
While the executive order allows for strategies to increase Bitcoin holdings without extra taxpayer spending, no specific approach has been announced yet.
The announcement came ahead of the White House Crypto Summit but was overshadowed by concerns over inflation and ongoing trade tensions. JPMorgan analysts believe macroeconomic uncertainty will limit any near-term crypto gains.
Bitcoin remains below the critical $90,000 mark, and analysts caution that failure to break and sustain this level could lead to a decline toward $70,000.
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