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Bitcoin experienced a decline on Monday as fluctuations in the value of the leading cryptocurrency persisted following an executive order from President Donald Trump, which aims to establish a strategic bitcoin reserve for the U.S.
As of 9:42 a.m. Singapore time, bitcoin was priced at $81,712, down more than 5% but recovering from earlier lows, according to Coin Metrics.
This reserve will consist of coins seized through criminal and civil forfeiture proceedings, with no plans for the U.S. government to purchase additional bitcoin. Following the announcement of the strategic reserve last Thursday, cryptocurrency prices fell as investors expressed disappointment over the lack of a more assertive strategy.
Other cryptocurrencies also saw declines on Monday. Both ether and XRP dropped roughly 7.5% around 9:43 a.m. Singapore time.
Nonetheless, some investors believe that the establishment of a reserve is a positive sign for the future.
“I firmly believe the market is misinterpreting this,” Matt Hougan, chief investment officer at Bitwise Asset Management, stated during an appearance on CNBC’s “Squawk Box Asia” on Monday. “The market is reacting with short-term disappointment” because the government did not announce plans to acquire 100,000 or 200,000 bitcoin immediately, he elaborated.
Hougan referenced comments on X from White House Crypto and AI Director David Sacks, who indicated that the U.S. would seek “budget-neutral strategies for acquiring more bitcoin, considering these approaches have no additional costs to American taxpayers.”
“The essential question is: did this executive order increase the likelihood that bitcoin will emerge as a significant geopolitical currency or asset in the future? Will other nations consider following the U.S. example and establish their own strategic reserves? I would emphatically say yes,” Hougan remarked.
“This question matters because it will determine whether bitcoin is valued at $80,000 per coin or $1 million per coin.”
Hougan described the current drop in cryptocurrency prices as a “temporary setback.”
“I believe the market will stabilize soon and recognize that this development is actually very bullish for this asset and for the crypto sector as a whole,” he concluded.
