Bitcoin price plummeted 6% on March 7th.
Bitcoin price plummeted 6% on March 7th after US President Donald Trump signed an executive order establishing a Bitcoin strategic reserve fund.
Bitcoin prices fell sharply on March 7th after US President Donald Trump announced the establishment of a new cryptocurrency reserve. However, this reserve does not require the government to purchase digital assets, resulting in a negligible impact on the market.
Following the announcement, the price of Bitcoin dropped by as much as 6%, to $84,864.3.
David Sacks, the White House's cryptocurrency adviser, said President Trump signed an executive order Thursday night to establish a strategic Bitcoin reserve, alongside a broader digital asset reserve.
However, these reserves do not include the US government's purchase of additional cryptocurrency. Instead, they will hold Bitcoin and other digital currencies seized in criminal and civil cases.
Currently, the US Department of Justice holds approximately 200,000 Bitcoin, worth over $17 billion at market value. A portion of this has been sold on the market through a partnership with Coinbase.
The new executive order also doesn't require the government to continue selling cryptocurrency, but the lack of further purchases means the market won't receive government support. Previously, there was speculation that President Trump might persuade Congress to establish a Bitcoin fund, which could lead to government crypto purchases, but this scenario doesn't seem very likely.
Last week, President Trump proposed adding five cryptocurrencies to the reserve: Bitcoin, Ether, Solana, Cardano, and XRP. However, following today's announcement, all of these coins have fallen in price.
Ether fell 6%, while XRP, Solana (SOL), and Cardano (ADA) declined between 3.7% and 14%.
