President Donald Trump's executive order establishing a Strategic Bitcoin (CRYPTO: BTC) Reserve did not have the expected bullish impact on Thursday, as the leading cryptocurrency dropped on the announcement.
What happened: The reserve will be capitalized with Bitcoin already owned by the federal government, obtained through forfeiture proceedings, valued at approximately $17 billion. Additionally, a U.S. Digital Asset Stockpile would be set up, consisting of cryptocurrencies other than Bitcoin. Both entities will be under the control of the Treasury Department, the order read.
The order directed all federal agencies to provide a full accounting of all assets held in their possession to the Treasury Secretary President's Working Group on Digital Asset Markets within the next 30 days
While the government won't sell any BTC, it will also not buy any new Bitcoin unless it can do so in a "budget-neutral" way and without imposing incremental costs on American taxpayers.
Noted economist and Bitcoin critic Peter Schiff interpreted it as simply seizing more Bitcoin and adding them to the reserve.
"But they can’t buy any more, as buying by definition requires a payment," Schiff said.
Bitcoin advocate God Almaxi argued that the government can sell other seized assets to buy Bitcoin as long as there's no net cost for taxpayers.
See Also: Microsoft May Have Given Bitcoin Investments A Miss But A Large MSFT Stock Holder Is A Strong Crypto, Blockchain Advocate
Another well-known cryptocurrency influencer, Kashif Raza, said the dull reaction was due to high expectations that the government would buy 200,000 BTC per year.
Notably, Sen. Cynthia Lummis' (R-Wyo.) legislation had proposed the purchase of 1 million Bitcoins over five years.
Raza further highlighted that there was no provision to buy additional assets for the Digital Asset Stockpile--presumably consisting of Ethereum (CRYPTO: ETH), XRP (CRYPTO: XRP), Solana (CRYPTO: SOL), and Cardano (CRYPTO: ADA).
The cryptocurrency industry will shift its focus to Friday’s White House Crypto Summit, featuring notable industry figures such as Michael Saylor alongside government officials like Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, to learn more about the structure of the reserve.
Price Action: At the time of writing, Bitcoin was exchanging hands at $$87,580.33, down 4.08% in the last 24 hours, according to data from Benzinga Pro.
Image via Shutterstock
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