US President Donald Trump has unveiled a strategic reserve for cryptocurrency, which sparked little cheer among traders. The reserve will be formed from Bitcoin seized by the federal government in criminal or civil actions and will not entail any new government-funded purchases of digital assets.
Bitcoin fell 1.3% to $89,756.0 after Trump’s announcement, but pared some losses as analysts argued that the reserve represented a positive development for crypto markets. The world’s biggest cryptocurrency had fallen as low as $84,000 shortly after Trump’s crypto czar, David Sacks, announced plans for the reserve.
The government holds about 200,000 Bitcoins seized over the past 15 years and will not sell any more of its crypto holdings. However, it will keep the Bitcoin reserve as a store of value. Trump also authorized his commerce and Treasury secretaries to explore “budget-neutral” purchases of Bitcoin.
Despite the lack of new coin purchases, analysts see the formation of the reserve as a positive sign for digital assets. TD Cowen analysts noted that while the government is not spending taxpayer dollars on new digital assets, it is not selling the ones that it seizes.
Broader crypto prices also sank, with Solana, Ether, Cardano, and XRP seeing few gains. World no.2 crypto Ether fell 2.5% to $2,199.10, while XRP slid 3.7%. Cardano tanked 6.4%, while Solana fell 1.7%.
The announcement has sparked limited enthusiasm from crypto markets, with many traders feeling that Trump’s stance on cryptocurrency is uncertain. The focus is now on the White House crypto summit later in the day.
Meanwhile, US job growth accelerated in February, with employers adding 151,000 jobs according to data from the Bureau of Labor Statistics. However, the unemployment rate inched up to 4.1% and labor force participation declined slightly.
Source: https://www.investing.com/news/cryptocurrency-news/bitcoin-price-today-sinks-as-low-as-84k-as-trump-reserve-underwhelms-3914082