{"id":295179,"date":"2025-03-07T21:30:40","date_gmt":"2025-03-07T21:30:40","guid":{"rendered":"https:\/\/newhampshiredigitalnews.com\/index.php\/2025\/03\/07\/why-bitcoin-dropped-following-the-us-btc-reserve-launch\/"},"modified":"2025-03-07T21:30:40","modified_gmt":"2025-03-07T21:30:40","slug":"why-bitcoin-dropped-following-the-us-btc-reserve-launch","status":"publish","type":"post","link":"https:\/\/newhampshiredigitalnews.com\/index.php\/2025\/03\/07\/why-bitcoin-dropped-following-the-us-btc-reserve-launch\/","title":{"rendered":"Why Bitcoin dropped following the US BTC reserve launch?"},"content":{"rendered":"


\n
<\/p>\n

\n

On Mar. 7, 2025, crypto investor and Wolf of All Streets podcast host Scott Melker dedicated a huge part of his Wolf Den newsletter to the meaning of the Bitcoin reserve launch and the public reaction to it. Later that day, he added several statements via his X account, explaining the importance of this historic event.<\/p>\n

The U.S. Strategic Bitcoin Reserve creation<\/h2>\n

Donald Trump promised the launch of the Bitcoin stockpile during his speech in the summer of 2024 at the Nashville Bitcoin conference. Around the same time, Sen. Cynthia Lummis introduced the BTC reserve bill, which suggested that the U.S. should acquire one million bitcoins over five years.\u00a0<\/p>\n

Expectations were high. Crypto X was full of posts with hopes that Trump would sign the Bitcoin reserve creation order right after the inauguration. The reality turned out to be less thrilling as Trump didn\u2019t even mention crypto in his inauguration speech. However, he pardoned Ross Ulbricht of Silk Road, which he promised to do. The Bitcoin reserve plans were confirmed later, and Sen. Lummis joined the Senate Banking Subcommittee on Digital Assets as a chair.\u00a0<\/p>\n

On Mar. 6, the executive order<\/a> to establish a Bitcoin reserve was signed. The reserve turned out to be different from the one Lummis proposed. Its spirit is much closer to the initial Trump vision of a stockpile made up of the seized bitcoins that the government will not sell. The reserve will be growing via seizures and forfeitures so that it will not use the taxpayers\u2019 money. More than that, the reserve can be increased using other avenues not associated with taxes.\u00a0<\/p>\n

\n
\n
\n

I have a few budget-neutral strategies for acquiring additional bitcoin\u2026<\/p>\n

\u2014 Michael Saylor\u26a1\ufe0f (@saylor) March 7, 2025<\/a><\/p><\/blockquote>\n<\/div>\n<\/figure>\n

Currently, the U.S. is holding around 200k bitcoins. The accurate amount is not clear yet, so the government is conducting an audit. The Digital Assets Stockpile was created on the same date. This one will include other cryptocurrencies, namely ETH, ADA, SOL, and XRP. Some allege<\/a> there is a possibility for a conflict of interest as White House crypto czar David Sacks may indirectly profit from creating the reserve of these cryptocurrencies. Sacks denies these accusations.<\/p>\n

<\/p>\n

Following the creation of the Bitcoin Reserve, the BTC price dropped by $5,000, while the creation of the Strategic Bitcoin Reserve has always been perceived as a trigger that will let bulls out. Scott Melker explained why the price dropped and why the move was great despite the criticisms.<\/p>\n

The price drop explained<\/h2>\n

Scott Melker decisively associates the price drop with the disappointment from those who were expecting that the Strategic Bitcoin Reserve launch would be followed by buying Bitcoin in large amounts.<\/p>\n

\n
\n
\n

The reaction to the Strategic Bitcoin Reserve makes one thing clear:<\/p>\n

Most people who claim to be in Bitcoin for the fundamentals really just care about number go up.<\/p>\n

The U.S. locking up BTC as a store of value is massive long-term validation\u2014but because it\u2019s not an instant\u2026<\/p>\n

\u2014 The Wolf Of All Streets (@scottmelker) March 7, 2025<\/a><\/p><\/blockquote>\n<\/div>\n<\/figure>\n

Melker starts his message in the newsletter with \u201cwe did it,\u201d calling recognizing Bitcoin as a strategic asset\u201d[America\u2019s] biggest move yet in the Bitcoin game.\u201d From the start, Melker states that other countries will have to follow suit in the Bitcoin race. He stresses that the U.S. will barely tolerate being second after China in terms of the BTC reserve. As of now, the U.S. reserve may be less than the Chinese one. It sets the stage for the global Bitcoin race that will move the price up in the long term.<\/p>\n

Further, Melker explains that the difference between the Digital Assets Stockpile and the Strategic Bitcoin Reserve indicates that the U.S. explicitly considers Bitcoin the only cryptocurrency fitting the criteria of a strategic asset worth finding potential acquisition avenues.<\/p>\n

\n

\u201cWhile some critics argue this doesn\u2019t immediately impact the market because the government isn\u2019t actively buying Bitcoin yet, they\u2019re missing the long-term significance. The U.S. just signaled that Bitcoin is here to stay as a key financial asset, and history tells us that when America sets the standard, the rest of the world follows\u201d.<\/p>\n<\/blockquote>\n

\n

As for the price drop, Melker throws in another factor, saying that when the big news \u201cdrops into an illiquid market \u2014 leverage flushes out weak hands.\u201d Then, the bigger investors show up, moving the price up. And that\u2019s what actually happened next. The Wolf of All Streets host continues by saying that the global demand for Bitcoin stimulated by the SBR launch will increase the upward pressure in the long term.<\/p>\n

Other reactions<\/h2>\n

There were angry voices across the Internet after the details of the BTC reserve were revealed. Many people were disappointed by the decision not to spend tax money to buy more Bitcoin. Some don\u2019t even see much difference between U.S. Marshalls holding seized bitcoins and the U.S. Treasury holding the same coins in the SBR.<\/p>\n

\n

Understandingly, Scott Melker confronted this point of view as it ignores what is written in the order, which doesn\u2019t deny the future budget-neutral BTC acquisitions.\u00a0<\/p>\n

\n
\n
\n

If you think that the Bitcoin SBR is bad news because it will only contain seized bitcoin, then you are bad at reading and worse at comprehending what you are reading. <\/p>\n

Sell me your Bitcoin.<\/p>\n

\u2014 The Wolf Of All Streets (@scottmelker) March 7, 2025<\/a><\/p><\/blockquote>\n<\/div>\n<\/figure>\n

Jeff Park of Bitwise Invest dismissed the executive order, saying there was nothing strategic about it. Park said the entire SBR story turned out to be a major pump-and-dump chapter, and he is happy it\u2019s over.\u00a0<\/p>\n

\n
\n
\n

I\u2019m honestly just glad we can get this pump and dump chapter finally over with and move on to the things that actually matter <\/p>\n

Tax policies for crypto capital gains
10y rates
Bitcoin backed stablecoin<\/p>\n

\u2014 Jeff Park (@dgt10011) March 7, 2025<\/a><\/p><\/blockquote>\n<\/div>\n<\/figure>\n

Many Bitcoin bulls praised the move, expressing little to no disappointment, calling the executive order historical. For instance, Senator Lummis voiced her full support for the move despite her project being rejected. The only concern she raised was the lack of congressional support for the Strategic Bitcoin Reserve.<\/p>\n

\n

A prominent Bitcoin supporter using the moniker Bitcoin Therapist called the order \u201cthe most bullish news [he has] seen in the past four years.\u201d<\/p>\n

\n
\n
\n

GM. THE UNITED STATES IS GOING TO BUY BITCOIN. THIS IS A FACT. READ THE FINE PRINT. ANYONE WHO SAYS DIFFERENTLY IS BEING DISINGENUOUS. THIS IS THE MOST BULLISH NEWS I\u2019VE SEEN IN PAST 4 YEARS. THE ENTIRE WORLD IS NOW ON HIGH ALERT. BITCOIN TREASURIES ARE COMING.<\/p>\n

\u2014 The \u20bfitcoin Therapist (@TheBTCTherapist) March 7, 2025<\/a><\/p><\/blockquote>\n<\/div>\n<\/figure>\n

Anyways, the U.S. crossed the Rubicon. We\u2019ll see what happens next.<\/p>\n

<\/p><\/div>\n