President Donald Trump signed an executive order on Thursday establishing a national crypto reserve, fulfilling a longtime dream of the crypto industry. And although many expected Bitcoin to benefit from the news, it tumbled 6%.
The price of Bitcoin fell from $90,400 to $85,000 within minutes of the announcement. The broader crypto market experienced a similar decline with XRP falling 8%, Solana down 6%, and Ethereum losing 5% within the hour.
The dip is likely due to the way in which the government will fill its crypto coffers. AI and crypto czar David Sacks revealed that the U.S. would not be buying new cryptocurrency, but instead use the stockpile of Bitcoin it has already seized from criminal entities over the years to create the reserve. The same is true for other cryptocurrencies that will be held in a separate stockpile.
Rachel Lin, CEO and cofounder of decentralized exchange SynFutures, told Fortune that the details of how the government will acquire the cryptocurrencies is what let investors down: “The executive order establishing a U.S. strategic Bitcoin reserve didn’t spark a price rally because the market expected new government purchases, but currently it only used existing seized Bitcoin, leading to disappointment.”
Anticipation for a crypto reserve had been building ever since Trump signed an executive order in January directing government officials to explore the idea. The policy was supported by crypto enthusiasts and industry leaders who said large government purchases of crypto would increase demand for the asset class and drive prices higher.
The crypto reserve announcement comes as the industry’s largest players descend on the White House for the first-ever crypto summit on Friday to discuss digital asset policy. The event will be hosted by Trump. Confirmed attendees include Coinbase CEO Brian Armstrong, Robinhood CEO Vlad Tenev, and Ripple executive chairman Brad Garlinghouse.
The crypto world is anxiously waiting to see if additional announcements will come out of Friday’s summit. Sacks wrote on X earlier this week: “President Trump is keeping his promise to make the U.S. the ‘Crypto Capital of the World.’ More to come at the Summit.”
