Bitcoin extended its decline on Monday, dropping 5.9% to US$81,379.24 as at 12:10pm today as traders reacted to US President Donald Trump’s Strategic Bitcoin Reserve order and escalating US trade tariffs. Ethereum also suffered (down 7.4% to $2,042.80), while Dogecoin led losses among major cryptocurrencies, tumbling 11.8% to $0.171.
Despite initial optimism surrounding Trump’s executive order, which established a Bitcoin Strategic Reserve, investors appeared disappointed by the lack of immediate government Bitcoin purchases. Instead of using taxpayer funds to buy Bitcoin, the US government will only hold confiscated Bitcoin from criminal and civil asset forfeitures, currently estimated at 198,000 BTC (US$16.1 billion). This policy shift dampened bullish sentiment, as traders had hoped for direct market intervention.
“The knee-jerk reaction lower likely stems from the realization that no actual budget has been allocated for Bitcoin purchases in the near term,” noted Singapore-based digital asset trading firm QCP Capital.
Adding to market uncertainty, US trade tariffs have rattled global markets, pushing investors away from risk assets, including cryptocurrencies. The recent non-farm payrolls (NFP) report has also raised fears of potential monetary tightening by the Federal Reserve, adding further pressure on Bitcoin prices.
While some analysts see the establishment of a Bitcoin reserve as a long-term milestone for institutional adoption, traders remain cautious. Bitcoin’s seven-day trading volume has plunged by 53%, and on-chain data indicates that whale holdings have fallen to their lowest level since 2019, suggesting a lack of confidence among large investors.
As Bitcoin struggles to hold above $80,000, analysts warn that further declines could test support levels at $78,000. The market now awaits Treasury and Commerce Department recommendations on how the US government may acquire additional Bitcoin without impacting the federal budget, a process that could shape the long-term outlook for digital assets.
