7-3-2025 – Bitcoin experienced a sharp decline following US President Donald Trump’s executive order establishing a Strategic Bitcoin Reserve, with the cryptocurrency falling from $67,650 to approximately $64,050 before partially recovering to $65,450, marking a 4.9% decrease over 24 hours. Ethereum similarly declined by 5.3%, settling at $1,619.
The market reaction suggests a classic “buy the rumour, sell the news” phenomenon, according to Peter Chung of Presto Research, who noted the absence of an anticipated parabolic response. “The next few hours may bring considerable volatility as market participants process these conflicting forces,” Chung remarked.
White House AI and Crypto Czar David Sacks revealed that the executive order signed on Thursday will create both a Strategic Bitcoin Reserve and a US Digital Asset Stockpile. Rather than purchasing new Bitcoin, the reserve will utilise cryptocurrency already in federal possession through criminal and civil asset forfeitures. Notably, Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick have been tasked with developing “budget-neutral strategies” for expanding these holdings.
Market disappointment stemmed largely from the funding mechanism, according to LVRG Research Director Nick Ruck. “Traders had anticipated more aggressive government acquisition of Bitcoin, not merely repurposing existing seizures,” Ruck explained. “This gap between expectation and reality transformed the announcement into a sell-the-news scenario, reducing anticipated buying pressure.”
Industry observers are keenly awaiting further clarification on how additional Bitcoin might be acquired under budget constraints, alongside potential plans for non-Bitcoin digital assets. The administration’s approach to fostering domestic cryptocurrency innovation and employment remains a focal point for analysts.
A “digital asset summit” scheduled for Friday in Washington DC has generated cautious optimism despite current market pessimism. “While Trump hasn’t promised substantial policy changes that might offset trade war concerns, the gathering of industry executives and government officials could produce unexpected bilateral announcements,” Ruck suggested.
Bitwise CIO Matt Hougan highlighted broader implications, noting that the establishment of a strategic reserve “substantially diminishes the possibility of future US government restrictions on Bitcoin.” He further suggested the move might accelerate other nations’ adoption of similar reserves as they attempt to secure positions ahead of potential American acquisition efforts, while simultaneously legitimising Bitcoin holdings for international financial institutions previously sceptical of the cryptocurrency.
