BTC and MSTR crash after Trump’s disappointing Bitcoin strategic reserve order

Bitcoin and crypto stocks took a hard hit after president Donald Trump signed an executive order to establish a Strategic Bitcoin Reserve on Thursday night, using America’s confiscated Bitcoin from criminal and civil cases.

The announcement, made by White House crypto Czar David Sacks, immediately sent Bitcoin tumbling by 5%, crashing to $85,000 within minutes.

Strategy ($MSTR), the biggest corporate holder of Bitcoin, plunged by over 7% , as investors blatantly show their disappointment at Trump’s actions yet again, probably because it’s vague.

I mean, check out the video below, it’s just Sacks talking. Trump looks as though he has no clue what’s even in this so-called reserve himself.

Trump disappoints crypto community — again

In a post on X, Sacks confirmed that no taxpayer money will be used to buy Bitcoin or any other cryptocurrencies. Instead, the government will stockpile 200,000 Bitcoin already in its possession—an amount that has never been fully audited.

“The U.S. will not sell any bitcoin deposited into the Reserve. It will be kept as a store of value. The Reserve is like a digital Fort Knox for the cryptocurrency often called ‘digital gold,’” said Sacks. “Premature sales of bitcoin have already cost U.S. taxpayers over $17 billion in lost value. Now the federal government will have a strategy to maximize the value of its holdings.”

While many Bitcoin supporters initially backed Trump for his pro-crypto facade, his latest actions have turned the community against him. In a Truth Social post over the weekend, Trump revealed that shitcoins XRP, Solana (SOL), and Cardano (ADA) would also be part of the Strategic Crypto Reserve, after promising a Bitcon reserve on the campaign trail.

Tyler Winklevoss, a longtime Bitcoin lover, said: “I have nothing against XRP, SOL, or ADA, but I do not think they are suitable for a Strategic Reserve. Only one digital asset in the world right now meets the bar, and that digital asset is Bitcoin.”

Nic Carter, co-founder of Castle Island Ventures, shares Tyler’s concerns, telling CNBC that the decision could damage Bitcoin’s long-term positioning. “The U.S. is clearly the most important nation in the world, and so their stamp of approval really does a lot for Bitcoin,” Carter said. “But by including other cryptocurrencies, it starts looking more like a speculative fund rather than a serious national reserve.”

Now many in the community see Trump’s Bitcoin reserve order as nothing more than damage control, albeit executed quite poorly. In his X post, Sacks said, “This Executive Order proves President Trump’s commitment to making the U.S. the crypto capital of the world. I want to thank the President for his leadership and vision in supporting this cutting-edge technology and for his rapid execution in supporting the digital asset industry. His administration is truly moving at tech speed.”

Trump’s actions keep crashing markets

The broader stock market also showed weakness after the executive order, as the Nasdaq Composite has dropped by 8% since Trump’s second term began. The S&P 500 has fallen by 4.3% since Inauguration Day. The Russell 2000 sank 9.2%, one of its worst performances in 2025, per data from CNBC.

According to data from CoinGecko, Bitcoin is now up 29% since the election, but down 18% since Inauguration Day, Ethereum is down 12% since the election, 37% since Inauguration Day, XRP is up 380% since the election, but down 23% since Trump’s second term began, and Solana has dropped 50% since Inauguration Day.

Michael Saylor, founder of Strategy and Bitcoin’s unofficial CEO plus hype man extraordinaire, has not publicly spoken about the Bitcoin reserve news.

Crypto-loving Senator Cynthia Lummis, who first came up with the Bitcoin reserve idea, said, “We are becoming the bitcoin and digital asset capital of the world. America is so ₿ack. Stay tuned for next week.”

Before the reserve was announced, the U.S. government had a long history of selling Bitcoin at bargain prices. According to David Sacks, over the last ten years, the federal government sold 195,000 Bitcoin for just $366 million. If they had held onto it, that same Bitcoin would be worth $17 billion today.

Sacks described the losses as a huge mistake. “That’s how much it has cost American taxpayers not to have a long-term strategy,” he said. The Strategic Bitcoin Reserve is supposed to fix that problem by ensuring that the government holds its Bitcoin, rather than dumping it at low prices.

Treasury Secretary Scott Bessent is scheduled to appear on CNBC’s “Squawk Box” at 7 a.m. New York time on Friday, where he is expected to address concerns about how the Strategic Bitcoin Reserve could affect markets. 

Investors will be looking for clarity on how the government plans to acquire more Bitcoin without affecting the price, since Sacks said, “I also want to thank the President’s Working Group on Digital Asset Markets — especially Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick — for their help and support in getting this done. Finally Bo Hines played a critical role as Executive Director of our Working Group.”

XRP lawyer Johnny Deaton explained to the community that: “What David is trying to tell you is that Donald Trump’s EO is unbelievably Bullish. Scott Bessent and Howard Lutnick have been DIRECTED by the POTUS to find “budget neutral” ways to acquire BTC. Two years ago, we would’ve been laughed off stage for suggesting that such a thing could happen.”

In a separate post, Johnny shared an idea that America should allow taxpayers to pay their federal taxes in BTC, without incurring capital gains liability, and the government can take a fraction of each tax payment (.05-1%) in BTC and forward it to the Strategic Reserve. “The Federal Government and the American taxpayer in a true partnership and both win,” said Sacks.

Meanwhile, Fed Chair Jerome Powell is set to speak on “Halftime Report”, where he will definitely be asked to comment on whether the Bitcoin reserve fits into the Federal Reserve’s long-term economic strategy.

Bond markets have also been reacting, with the 10-year Treasury yield now at 4.27%, while the 2-year Treasury yield sits at 3.95%. Goldman Sachs analysts are speculating that the government’s Bitcoin policy could lead to changes in the bond market.

The CoinDesk 20 Index, which tracks a broad range of crypto assets, is up nearly 40% since the election, but has lost 31% since January 20th.

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