Investing.com-- Bitcoin fell on Friday after U.S. President Donald Trump’s newly established crypto reserve entailed no government purchases of digital assets, pointing to little actual market impact from the stockpile.
Bitcoin fell as much as 6% to $84,864.3 after the announcement of the reserve.
White House crypto czar David Sacks said on Thursday evening that Trump had signed an executive order to establish a strategic Bitcoin reserve, as well as a broader digital asset reserve.
But the reserves will not involve any government-funded purchases of crypto, and will instead hold Bitcoin and other crypto confiscated by the federal government in criminal and civil proceedings.
The Department of Justice holds around 200,000 Bitcoins, which are worth just over $17 billion, based on current prices. The agency has intermittently sold some of its holdings on the open market through a tie-up with Coinbase (NASDAQ: COIN ).
While Thursday’s order will see no future crypto sales by the government, a lack of fresh purchases entails little government support for the market. Speculation over Trump’s long-touted Bitcoin reserve included hopes that he would convince Congress to establish the reserve- a scenario that while unlikely, would have potentially involved government purchases of the crypto.
Trump had last week outlined five cryptos- Bitcoin, Ether , Solana , Cardano , and XRP - for inclusion in his reserve. All five cryptos tumbled on Friday.
Ether fell 6%, while XRP, SOL, and ADA slumped between 3.7% and 14%.