Bitcoin declined on Monday amid ongoing volatility following President Donald Trump’s executive order to establish a U.S. Strategic Bitcoin Reserve.
Bitcoin was trading at $81,712, down over 5 per cent but recovering from earlier lows, according to Coin Metrics.
The reserve will be funded with bitcoin seized in criminal and civil forfeiture cases, with no plans for additional government purchases. Following the announcement last Thursday, crypto prices fell as investors were disappointed by the lack of a more aggressive approach.
Other cryptocurrencies also declined on Monday, with Ether and XRP dropping about 7.5% as of 9:43 a.m. Singapore time.
Some investors, however, viewed the establishment of the reserve as a long-term bullish signal.
“I absolutely think the market has this wrong,” Matt Hougan, chief investment officer at Bitwise Asset Management, told CNBC on Monday. “The market is short-term disappointed” that the government didn’t say it was immediately going to start acquiring 100,000 or 200,000 bitcoin, he added.
Hougan referenced comments on X from White House Crypto and AI Czar David Sacks, who stated that the U.S. would explore “budget-neutral strategies for acquiring additional bitcoin, provided that those strategies have no incremental costs on American taxpayers.”
“I think the right question to ask is: did this executive order make it more likely that in the future, bitcoin will be a geopolitically important currency or asset? Will other governments look to follow the U.S.’s lead and build their own strategic reserve? And to me, the answer to that is emphatically yes,” Hougan said.
