Bitcoin Price USD Drops 5% After US Strategic Reserve Announcement
The move is seen as a significant development in the US government's approach to cryptocurrencies, with potential implications for the global market. While some critics have called the announcement a rebranding of existing holdings, others see it as a step towards greater adoption and recognition of Bitcoin as a legitimate asset.
President Donald Trump's announcement of a Strategic Bitcoin Reserve has led to a 5% drop in Bitcoin prices, with the cryptocurrency falling to around $80,650 on Monday. The reserve will hold cryptocurrencies forfeited to the government through criminal or civil proceedings, with an estimated 200,000 Bitcoin worth $17.5 billion already in the federal government's possession.
The establishment of the reserve has been met with mixed reactions, with some analysts praising the approach as "budget neutral" while others warn of a "horrible precedent" and a risk to public trust. Critics have also raised concerns about the lack of transparency and the risk of arbitrary asset selections. Despite these concerns, some investors see the move as bullish in the long-term, citing potential increased demand from other governments following the US lead.
The US government will not sell any Bitcoin in the reserve, and the Treasury and Commerce secretary will develop strategies for acquiring more, provided they are budget neutral. The reserve will be funded by seized coins, with no plans for the US government to buy more Bitcoin. White House AI and crypto tsar David Sacks has estimated the existing federal government's crypto reserves to be around 200,000 Bitcoin, worth $17.5 billion.
The announcement has significant implications for the cryptocurrency market, with some investors optimistic about the potential for increased adoption and others warning of the risks of government involvement. As the situation continues to unfold, it remains to be seen how the establishment of the Strategic Bitcoin Reserve will impact the Bitcoin price USD in the long term.