Bitcoin price on March 7 dropped sharply by 6%
Bitcoin price on March 7 fell sharply by 6% after US President Donald Trump signed an executive order to establish a Bitcoin strategic reserve fund.
Bitcoin prices fell sharply on March 7 after US President Donald Trump announced the creation of a new cryptocurrency reserve. However, the reserve does not require the government to buy digital assets, making the impact on the market insignificant.
Following the announcement, Bitcoin price fell as much as 6% to $84,864.3.
President Trump signed an executive order Thursday evening that aims to establish a strategic Bitcoin reserve, along with a broader digital asset reserve, White House cryptocurrency adviser David Sacks said.
However, these reserves do not include the US government buying more cryptocurrencies. Instead, they will hold Bitcoin and other digital currencies seized in criminal and civil cases.
The US Department of Justice currently holds around 200,000 Bitcoins, worth more than $17 billion at market value, some of which have been sold on the market through a partnership with Coinbase.
The new executive order also does not require the government to continue selling cryptocurrencies, but the lack of new purchases means the market will not receive government support. There has been speculation that President Trump could convince Congress to create a Bitcoin fund, which could lead to government purchases of crypto, but this scenario is not really feasible.
Last week, President Trump proposed five cryptocurrencies to be included in the reserve including Bitcoin, Ether, Solana, Cardano and XRP. However, after today's announcement, all of these coins have dropped in price.
Ether fell 6%, while XRP, Solana (SOL) and Cardano (ADA) fell between 3.7% and 14%.