Bitcoin Plummets 6% After Trump's Strategic Reserve Announcement

Bitcoin experienced a significant drop of approximately 6% following the announcement by US President Donald Trump of an executive order to establish a Strategic Bitcoin Reserve. This move had been highly anticipated by market participants, who had hoped for a more substantial impact on the cryptocurrency market. The executive order aimed to create a reserve of Bitcoin and other cryptocurrencies, but the market's reaction fell short of expectations, leading to a decline in Bitcoin's value.

Prior to the announcement, Bitcoin had seen a surge in value, crossing the $90,000 mark. This increase was partly driven by statements from Commerce Secretary Howard Lutnick, who had hinted at the potential for a significant boost in Bitcoin's price following the establishment of the reserve. However, the actual implementation of the reserve did not live up to the hype, resulting in a 6% drop in Bitcoin's value.

The market's disappointment was evident as Bitcoin's price plummeted, despite earlier optimism. The cryptocurrency had been on an upward trajectory, with its market capitalization increasing to $1.928 trillion and a dominance of 60.71%. However, the 6% drop highlighted the volatility and unpredictability of the cryptocurrency market, even in the face of major policy announcements.

Trump's crypto tsar David Sacks clarified that the reserve would only use the Bitcoin it already holds from criminal cases, and it will look to develop “budget-neutral” strategies to acquire additional Bitcoin. This clarification further dampened market enthusiasm, as participants had hoped for a more aggressive acquisition strategy. The reserve will also include a “U.S. Digital Asset Stockpile,” consisting of digital assets forfeited in criminal or civil proceedings, but no additional assets will be acquired beyond those obtained through forfeiture proceedings.

Other major cryptocurrencies also felt the impact of the announcement. Ether (ETH), XRP (XRP), Solana (SOL), and Cardano (ADA) all experienced significant drops. Ether fell by 4%, XRP by 7%, Solana by 5.14%, and Cardano by 9.19%. The broader market reaction underscored the interconnected nature of the cryptocurrency ecosystem, where news affecting one major player can have ripple effects across the board.

As the market continues to digest the implications of Trump's executive order, the focus will likely