Bitcoin slides below $88,000; analysts say Trump’s Bitcoin reserve less bullish than anticipated

Bitcoin slid sharply after U.S. President Donald Trump signed an executive order today to establish a Strategic Bitcoin Reserve.

Bitcoin fell to around $85,400 from $90,200 on Thursday night after White House AI and Crypto Czar David Sacks posted about the executive order on X. The world's largest cryptocurrency has since recovered to around $87,271 at the time of writing, down 4.9% over the past 24 hours, according to The Block's price page . Ether lost 5.3% to trade at $2,159.

"BTC is not showing parabolic reaction which leads me to think that there is a certain amount of 'buy the rumor sell the news' type of activity going on," Peter Chung, head of research at Presto Research, told The Block. "It's only an hour into the news so the market may be volatile in the next hours as it digests colliding forces."

According to Sacks, Trump signed an executive order on Thursday to create a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile. "The Reserve will be capitalized with Bitcoin owned by the federal government that was forfeited as part of criminal or civil asset forfeiture proceedings," Sacks wrote in an X post . 

Sacks noted that the U.S. will not sell any Bitcoin deposited into the reserve. Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick are also authorized to develop "budget-neutral strategies" for acquiring additional bitcoin.

Nick Ruck, director of LVRG Research, pointed out that traders were "disappointed" because the bitcoin reserve announcement wasn't "as bullish as they hoped," as the reserve will be funded with Bitcoin obtained from criminal or civil asset forfeitures rather than government purchases.

"The announcement became a sell-the-news event, as the difference in expectations marked down the anticipated amount of buying pressure on the crypto market," said Ruck.

Meanwhile, Chung of Presto noted that it's worth paying attention to whether the U.S. will mention how to acquire additional Bitcoin in a budget-neutral way, as well as further details about what to do with non-BTC assets. "Any other discussion around how to nurture these assets and bring back more jobs in the U.S." is also what analysts are closely watching, Chung said.

Trump is set to host a "digital asset summit" on Friday afternoon in Washington, D.C., and several  crypto executives are expected to attend.

"Trump hasn't promised anything substantial for Friday's summit that could reverse the impact of the trade wars, so there is still a risk-off sentiment," said Ruck. "Traders hold some hope for surprise announcements between Trump and individual blockchain companies, as numerous industry leaders and key government department heads will be in attendance," he added.

Potential impact

Bitwise CIO Matt Hougan said that Trump establishing a bitcoin reserve "dramatically reduces the likelihood the U.S. government will someday 'ban' bitcoin." 

The news could also hasten other countries' decisions to establish their own strategic bitcoin reserves "because it creates a short-term window for nations to front-run potential additional buying by the U.S.," Hougan said.

It also makes it harder for institutions, such as the IMF, to position Bitcoin as somehow dangerous or inappropriate to hold, according to the Bitwise executive.