Stop using the old excuse of 'good news turning into bad news' to fool people. This time, the Bitcoin correction has nothing to do with Trump’s so-called hoarding order. As someone who has been in the crypto space for many years, I will now reveal the three truths behind this.
Truth One: The dealers set up a scheme, 'official announcements' cut the retail investors.
Trump plans to use confiscated Bitcoins to establish a strategic reserve. At first glance, this news seems positive for Bitcoin. But in reality, it is just handing Wall Street a 'shiny knife'.
On the institutional side, seeing that the government is personally involved in the Bitcoin sector, they are overjoyed, thinking that the process of compliance will surely accelerate, so they secretly increase their positions. Retail investors hear this news and feel like they are pumped up, thinking a bull market is about to come, and they rush in to buy without a second thought. But dealers will not let such a good harvesting opportunity slip away, and they will take the chance to liquidate the long positions. Isn’t this a typical case of 'official announcements and retail investors take the bait'?
Truth Two: Bull and bear transitions; the tactics remain the same.
Looking back at past market trends, such tactics of using news to pump and then dump are extremely common.
Take for example the previous event, on April 13, Hong Kong approved the Bitcoin ETF, and on that day, the price of Bitcoin soared by 8%. But right after, on April 14, Grayscale dumped 50,000 Bitcoins, and the next day, the price of Bitcoin plummeted by 12%. This White House meeting is also the same old routine, attracting attention before the meeting and then a 'needle' operation after, catching retail investors off guard. The dealers are so skilled in their harvesting methods that they don’t even bother to change their tactics.
Truth Three: Strategic reserves have a huge long-term impact.
The U.S. acknowledging Bitcoin as a strategic resource is equivalent to issuing a national-level 'pass' for Bitcoin. Furthermore, those Bitcoins seized from the dark web, after being laundered, will enter the national treasury, meaning the compliant Bitcoin liquidity pool will expand dramatically.
In the short term, market corrections are a normal phenomenon. Once the news broke, some people felt that the 'shoe had dropped' and quickly sold their Bitcoins to secure their profits; others entered the market with the mindset of trading based on the news and making a quick exit.
But we need to keep our vision long-term! The entry of the national team is incredibly significant! This means Bitcoin is no longer just a plaything in a small circle but has gained recognition at the national level, which is undoubtedly a powerful 'stimulant' for the entire cryptocurrency industry.
Strategic reserves are a long-term positive for Bitcoin. The national team hoarding coins is definitely not for short-term speculation, but has a long-term strategic layout. As a large amount of Bitcoin is hoarded, the circulation in the market will inevitably decrease significantly, and under the influence of supply and demand, Bitcoin prices will certainly rise in the long run.
Moreover, the national team's action has an immeasurable uplifting effect on market confidence. If the national team is starting to hoard coins, what do ordinary investors have to worry about? This will inevitably attract more capital into the cryptocurrency market.
So, the short-term correction is just a normal market reaction, but in the long run, the U.S. Bitcoin strategic reserve is definitely a major positive!
So, will the market rapidly rise because of this news? I think the possibility is low in the short term. After all, it takes time for market sentiment to digest this news. But once market confidence is restored and capital begins to flood in, Bitcoin will surely usher in a wave of unstoppable upward momentum!
