Bitcoin Plummets Following President Trump’s New Executive Order

The world’s largest cryptocurrency, Bitcoin, experienced a sharp decline on March 7 following President Donald Trump’s signing of an executive order to establish a Strategic Bitcoin Reserve.

Bitcoin Prices Drop Amidst Market Turbulence

According to data from CoinMarketCap, Bitcoin’s price unexpectedly plunged from $90,000 to below $85,000 per BTC on March 7 (Vietnam time). This correction significantly reduced the total market capitalization of Bitcoin to $1.74 trillion.

In response to Bitcoin’s downturn, other major cryptocurrencies also experienced considerable volatility, adjusting within a range of less than 10%.

Government’s Stance on Bitcoin Reserve Funding

Bloomberg reports that Bitcoin’s price drop was triggered by a statement from David Sacks, senior White House advisor on AI and cryptocurrency. Sacks clarified that the U.S. government would not use taxpayer funds to finance President Trump’s Strategic Bitcoin Reserve.

In the newly signed executive order, President Trump announced that the reserve would be built based on the amount of Bitcoin currently held by the federal government.

U.S. Government’s Current Crypto Holdings

At present, the U.S. government holds approximately $16.4 billion worth of Bitcoin, along with an additional $400 million in seven other cryptocurrencies. These assets were primarily acquired through civil and criminal asset forfeitures.

Trump’s Commitment to the Crypto Industry

During his election campaign, President Trump pledged to establish a Strategic Bitcoin Reserve. This initiative is one of several promises aimed at garnering support from the cryptocurrency industry, which has become a substantial contributor to political funding in recent years.

Prior to taking office, Trump also fulfilled his commitment to removing Gary Gensler from his position as Chairman of the U.S. Securities and Exchange Commission (SEC), a move that helped drive a strong rally in the cryptocurrency market.

Expanding the Reserve Beyond Bitcoin

Recently, on Truth Social, President Trump announced plans to include other cryptocurrencies, such as Ethereum (ETH), Solana (SOL), Cardano (ADA), and XRP, in the government’s reserve strategy.

However, this announcement has disappointed many Bitcoin advocates. Meanwhile, analysts are raising questions about how the government plans to finance the acquisition of these digital assets.

Market Reaction and Investor Concerns

“Based on David Sacks’ statement, the market seems to understand that the Strategic Bitcoin Reserve will be formed using previously seized Bitcoin assets. Earlier, many investors entered the market with expectations that the government would purchase additional Bitcoin. However, with this latest development, they are now exiting their positions,” said Stefan von Haenisch, Head of Trading for the Asia-Pacific region at cryptocurrency custodian firm BitGo.

According to Haenisch, the executive order grants authority to the U.S. Treasury Secretary and Commerce Secretary to develop “budget-neutral” strategies for acquiring additional Bitcoin, ensuring no additional financial burden on American taxpayers.