1. The Gap Between Expectations and Reality: Why Did the Market 'Dive in Reverse'?
On March 7, 2025, Trump signed an executive order to establish a 'Strategic Bitcoin Reserve', which was seen as a milestone event for the cryptocurrency industry, but the market responded with a sharp decline—Bitcoin dropped from $90,000 to $85,000 within an hour, with an intraday volatility exceeding 5%. Behind this unusual phenomenon lies a rupture of multiple market logics.
1. Positive News Realized as Negative: A Classic Reenactment of 'Buy the Expectation, Sell the Fact'
As early as March 3, Trump used social media to promote the idea of including 'five major cryptocurrencies (BTC, ETH, XRP, SOL, ADA) in the strategic reserves', causing Bitcoin to surge 9% to $93,969 in a single day, with other tokens also showing double-digit increases. The market had already preemptively priced in the policy dividends, and when the executive order ultimately confirmed 'confiscated Bitcoin as the core reserve' without proactive accumulation, investors quickly sold off their profit-taking positions.
2. Policy Details Cause Disappointment: Reserve Mechanism Becomes 'Conservative'
The executive order clearly states that reserves will only be funded through confiscated assets, and the government will not proactively buy or sell Bitcoin, and the Treasury must formulate a 'budget-neutral' strategy to acquire more tokens. This is far from the market's expectation of 'massive national accumulation', especially given Trump's previous suggestion of 'turning the U.S. into a crypto capital', creating a stark contrast.
3. Altcoin Panic: Trump's 'Selective Endorsement'
Although Trump mentioned that tokens like XRP and SOL might be included in the reserves, the final policy only clearly identified Bitcoin as the core asset and established a 'Digital Asset Reserve' to manage other confiscated tokens. This raised concerns among altcoin holders, with Bitcoin billionaire Tyler Winklevoss bluntly stating, 'Only Bitcoin meets the reserve standard.' The market fears that the policy will accelerate the concentration of funds towards Bitcoin, leading to the sell-off of altcoins and dragging down the overall market.
2. Long-term Impact: Policy Dividends and Hidden Worries Coexist
1. Bitcoin's 'National Endorsement': An Upgrade in Its Store of Value Status
The inclusion of Bitcoin in the U.S. strategic reserves marks a key step in its 'quasi-monetization' process. The government commits not to sell the reserve Bitcoin and plans to enhance transparency through audits (currently holding about 200,000 coins, valued at about $170 billion), providing institutional support for Bitcoin's long-term value as 'digital gold'. Nic Carter of Castle Island Ventures believes this move could propel Bitcoin to be on par with gold as a global reserve asset.
2. Regulatory Framework Accelerating Formation: Compliance and Risk Coexist
The Trump administration is simultaneously advancing cryptocurrency regulatory legislation, such as Texas passing the (Bitcoin Reserve Bill), and Japan planning to lower the cryptocurrency tax rate from 55% to 20%. These measures may attract more institutional participation, but policy uncertainty remains—such as whether the U.S. will strengthen regulation on other tokens and how countries will coordinate their positions, which could trigger periodic market fluctuations.
3. Market Structure Reshaping: Strengthening Bitcoin's 'Hegemony'
Policies clearly differentiate Bitcoin from other tokens, which may accelerate the trend towards 'Bitcoin Standard'. If institutional funds further concentrate on Bitcoin, the survival space for altcoins may be squeezed, especially projects unrelated to 'strategic reserves' will face stricter liquidity tests.
3. Future Outlook: Short-term Volatility and Long-term Game
In the short term, the market needs to digest the policy expectation gap, and Bitcoin may enter a wide fluctuation range of $80,000 to $95,000. However, in the long run, U.S. policy injects three certainties into cryptocurrency:
Recognition of Legitimacy: Bitcoin becomes a national strategic asset, weakening the risk of a 'one-size-fits-all' regulatory approach;
Liquidity Assurance: The government holds a large amount of Bitcoin and commits not to sell, reducing market selling pressure;
Narrative Upgrade: Transitioning from 'Speculative Tool' to 'Inflation Hedge Reserve', attracting traditional capital into the market.
However, the complexity of geopolitical and economic environments cannot be ignored. If global stagflation risks worsen or the dollar credit system destabilizes, the demand for Bitcoin as a safe-haven asset may further explode; conversely, if the Federal Reserve shifts to aggressive interest rate hikes, short-term prices may still face pressure.
Conclusion: The 'Awakening Agent' in a Bull Market
Trump's Bitcoin reserve plan is not only a historic breakthrough for the industry but also a touchstone for market sentiment. The sharp decline reminds investors that policy dividends must resonate with fundamentals for lasting effects. For the crypto space, how to grasp technological innovation and value accumulation amid the global compliance wave will be a more important issue than short-term price fluctuations.
