Bitcoin Plummets 5.7% as Trump's Reserve Plan Unleashes Market Chaos

Bitcoin prices experienced a significant decline on Thursday, dropping by 5.7% within an hour as investors reacted to President Donald Trump's executive order establishing a Strategic Bitcoin Reserve. This move came after Bitcoin had surged above $92,000 earlier in the week, driven by speculation surrounding the initiative. However, the rally quickly faded as traders began to take profits and reassess the market impact of the government's new digital asset policy. Bitcoin later rebounded slightly to $87,200.

Other major cryptocurrencies also felt the impact, with Ethereum losing 6.1% to $2,100, Solana declining 6.8%, and Dogecoin dropping 5.8%. Binance’s BNB fell 3.6% to $576, while Cardano saw the most significant loss, falling 13.8% to $0.81.

The executive order, signed on Thursday, authorizes the creation of a Bitcoin reserve using assets seized in criminal and civil forfeiture cases. The government holds an estimated 200,000 BTC, worth about $17.7 billion, which will form the core of the stockpile. White House AI and Crypto Czar David Sacks described the reserve as a “digital Fort Knox,” emphasizing that it would not require additional taxpayer funding.

This move adds another layer of uncertainty to an already volatile market. While some investors view it as a long-term bullish signal, others remain cautious about how the government plans to manage its holdings. The broader crypto market faced pressure amid a pullback in risk assets, even as global equity futures signaled cautious optimism.

Investors are also looking ahead to the European Central Bank’s upcoming meeting, where a rate cut is widely expected amid rising euro area yields and changes to Germany’s fiscal policy. Bitcoin remains up nearly 30% year-to-date, bolstered by inflows into U.S.-listed spot Bitcoin exchange-traded funds. However, market participants appear to be awaiting further regulatory developments and details on how the government intends to handle its Bitcoin reserves going forward.

U.S. President Donald Trump's executive order to establish a Strategic Bitcoin Reserve has had a notable impact on the cryptocurrency market. Initially, the announcement led to a sharp but temporary surge in cryptocurrency prices, with Bitcoin rising by 11% to