Cryptocurrency markets fell by as much as 6 percent following United States President Donald Trump’s announcement of an executive order to establish a Bitcoin strategic reserve and digital asset stockpile. The order did not include plans for the government to actively purchase Bitcoin, causing the value of the cryptocurrency to drop. The government’s estimated 200,000 seized Bitcoin assets will be used to capitalize the Strategic Bitcoin Reserve and Digital Asset Stockpile, according to Trump’s crypto tsar David Sacks.
While some enthusiasts were disappointed by the lack of government purchases, others expressed concerns about the market impact of the announcement. Critics have warned that Bitcoin and other cryptocurrencies have no intrinsic value and likened their rise to a Ponzi scheme. Despite this, Trump’s support for cryptocurrency has been evident, with his family accumulating billions in crypto wealth and even launching a Trump meme coin.
The executive order also calls for the establishment of a separate stockpile for digital assets other than Bitcoin that have been forfeited in criminal or civil proceedings, including tokens such as ether, XRP, Solana, and Cardano. Sacks suggested that the reserves would function like a “digital Fort Knox” to help maintain the value of the assets. The value of Bitcoin had previously soared after Trump’s election, reaching a record peak of $109,071 in mid-January. Overall, the reaction to Trump’s order to create a cryptocurrency reserve has been mixed, with some disappointed by the lack of government purchases and others expressing concerns about the market impact.
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