by Bitcoin experienced a decline on Monday as price volatility continues following an executive order by President Donald Trump to establish a strategic bitcoin reserve for the U.S.
Earlier in the day, Bitcoin prices dropped by as much as 6.5%, reaching around $80,650 before recovering most of the losses. By 4:12 a.m., the cryptocurrency was down 0.74%, trading at $82,050, according to Coin Metrics.
The reserve will be funded using bitcoin seized in criminal and civil forfeiture cases, with no plans for the U.S. government to purchase additional bitcoin. After the reserve announcement last Thursday, crypto prices fell as investors expressed disappointment that the program was not more aggressive.
Other cryptocurrencies also saw fluctuating prices on Monday. Both Ether and XRP were in the green by 4:12 a.m. after experiencing earlier drops of around 7.5%.
Some investors, however, see the creation of a bitcoin reserve as a positive long-term move.
Matt Hougan, Chief Investment Officer at Bitwise Asset Management, shared his view on CNBC’s Squawk Box Asia on Monday, stating, “I absolutely think the market has misunderstood this.” He pointed out that the short-term market reaction was due to the lack of an immediate announcement from the government regarding large bitcoin purchases, such as acquiring 100,000 or 200,000 coins.
Hougan also referenced comments made by White House Crypto and AI Czar David Sacks on X, who stated that the U.S. would pursue “budget-neutral strategies for acquiring additional bitcoin, as long as those strategies don’t create additional costs for American taxpayers.”
“The key question is: does this executive order make it more likely that, in the future, bitcoin will become a geopolitically important asset or currency?” Hougan continued. “Will other countries follow the U.S.’s example and create their own strategic reserve?” He responded with a strong “Yes,” suggesting that such actions could greatly impact bitcoin’s future value.
“The reason this question is important,” Hougan concluded, “is because it will decide whether bitcoin is valued at $80,000 per coin or $1 million per coin.”
