Bitcoin declines as optimism falls on Trump’s ‘Crypto Strategic Reserve’

BERLIN

Bitcoin declined nearly 10% to below $85,000 after a brief surge following US President Donald Trump’s announcement of a “Crypto Strategic Reserve” on Sunday.

Trump stated in a Truth Social post that the move would lead to the rise of Bitcoin and Ethereum, as well as others, such as “XRP, SOL, and ADA,” thus boosting the crypto sector as a whole, suggesting that it would “elevate” cryptocurrencies after “years of corrupt attacks by the Biden Administration.”

The global cryptocurrency market fell over 10% in 24 hours to $2.7 trillion, according to data from CoinMarketCap.

Bitcoin was trading at $83,185 at 0800GMT Tuesday.

Ethereum, following Bitcoin in market cap, fell about 14% to $2,102.

Last month, Bitcoin fell over 17%, marking the biggest monthly decline since June 2022.

Optimism that Trump would support a strategic Bitcoin fund and end pressure on the cryptocurrency by former President Joe Biden had led to a significant rise in Bitcoin prices in November during Trump’s presidential campaign.

Analysts say that Trump’s statements raised concerns that funding for crypto purchases in the potential “strategic reserve” could also come from cryptocurrencies seized by law enforcement. This would be negative for cryptocurrencies, as it could lead to crypto transfers between accounts instead of new purchases entering the market.