Bitcoin drops over 5% amid market volatility following Trump’s bitcoin reserve plan

Cryptocurrency prices tumbled Monday as market volatility persisted in the wake of an executive order by President Donald Trump to establish a U.S. strategic bitcoin reserve. The announcement, which fell short of investor expectations, triggered a sell-off across major digital assets.

Bitcoin, the world’s largest cryptocurrency, fell more than 5%, trading at $81,712 as of 9:42 a.m. Singapore time, according to Coin Metrics. Ether and XRP also saw significant declines, each dropping approximately 7.5%.

The reserve, funded by bitcoin seized in criminal and civil forfeiture cases, does not include plans for additional government purchases, a detail that disappointed many in the crypto community. Investors had hoped for a more aggressive acquisition strategy to bolster the reserve.

Despite the immediate market reaction, some analysts view the move as a long-term positive for the cryptocurrency sector. “The market is short-term disappointed, but this could signal a shift toward bitcoin becoming a geopolitically important asset,” said Matt Hougan, chief investment officer at Bitwise Asset Management.

The executive order, signed last Thursday, directs a full accounting of the federal government’s digital asset holdings and explores budget-neutral strategies for acquiring additional bitcoin. However, the lack of immediate action has left investors questioning the plan’s impact on the broader market.

Cryptocurrency prices remain under pressure as the market digests the implications of the U.S. government’s latest foray into digital assets.