Bitcoin Falls Over 5% as Volatility Continues After Trump’s Bitcoin Reserve Plan
Crypto Market Reaction:
Cryptocurrency prices dropped on Monday following President Donald Trump’s announcement of a U.S. strategic Bitcoin reserve.
The move disappointed investors due to the lack of aggressive Bitcoin purchases by the government.
Bitcoin’s Drop:
Bitcoin was trading at $81,712 — down over 5% — at 9:42 a.m. Singapore time, according to Coin Metrics.
Despite the decline, the price was off earlier lows.
Other Cryptos Decline:
Ether and XRP also fell, both down about 7.5% as of 9:43 a.m. Singapore time.
The Strategic Bitcoin Reserve:
Trump’s executive order established the Strategic Bitcoin Reserve, funded by coins seized in criminal and civil forfeiture cases.
The U.S. government has no current plans to buy more Bitcoin — a key factor behind the market's negative reaction.
Investor Reactions:
Some investors see the move as bullish in the long term, despite the short-term drop.
Matt Hougan (Chief Investment Officer, Bitwise Asset Management) told CNBC’s “Squawk Box Asia”:
The market is “short-term disappointed” because there was no announcement of aggressive Bitcoin purchases (like 100,000 or 200,000 BTC).
Hougan emphasized the bigger picture:
He highlighted David Sacks’ (White House Crypto and AI Czar) comments about exploring “budget-neutral strategies” for acquiring more Bitcoin without adding to taxpayer costs.
Long-term Outlook:
Hougan suggested the critical question is whether this executive order increases the chances that Bitcoin becomes a geopolitically important asset.
He posed a thought-provoking scenario:
“Will other governments follow the U.S.’s lead and build their own strategic reserve?”
He firmly believes the answer is “emphatically yes”.
According to Hougan, this question will determine whether Bitcoin stays at $80,000 or climbs to $1 million per coin.
Final Thoughts:
Hougan described the current price drop as a “short-term setback”.
