By Nandita Bose and Jasper Ward
WASHINGTON (Reuters) – US President Donald Trump has signed an executive order to establish strategic preparations for cryptocurrency using tokens already owned by the government, disappointing some of the markets who wanted solid plans to buy new tokens.
The announcement came on Thursday ahead of a meeting with Crypto executives at the White House later on Friday, sending the price of Bitcoin down by about 5% to $85,000. In early European trading on Friday, Bitcoin recovered to trade at $89,200.
The “Strategic Bitcoin Reserve” is capitalized with federal-owned Bitcoin seized as part of criminal or civil assets forfeiture proceedings, and billionaire David Sachs' White House Crypto Charle said in a post on social media platform X.
The order kept the government open to the possibility of purchasing Bitcoin in the future. According to a fact sheet on the White House website, U.S. Commercial and Treasury secretaries are “allowed to develop budget-neutral strategies to acquire additional bitcoin.”
“We're committed to providing a range of services to our customers,” said Andrew O'Neill, managing director of digital assets at S&P Global Ratings.
“The reserves only include Bitcoin, which is already owned by the US government,” O'Neill said, adding, “We don't have a timeline yet, if any, how many indications will be obtained.”
Trump's promise of strategic preparation and hopes for ease of industrial regulation led to the token reaching an all-time high of $109,071.86 in January.
“This is the most overwhelming and disappointing result we could hope for this week,” wrote Charles Edwards, founder of Bitcoin-centric hedge fund Capriol Investment, in a post on X.
“An active purchase means this is just a flashy title for Bitcoin Holdings, which already existed in the government. It's a pig in the lipstick.”
Apart from Bitcoin Reserve, there is also a “US digital asset stockpile” consisting of non-Bitcoin tokens, but the government will not add it to its stockpile “beyond what was obtained through the forfeiture procedure.”
This week, Trump named the five digital assets he expected to include in his government's reserves, and spiked the market value of each. The five are Bitcoin, Ether, XRP, Solana and Cardano.
