The crypto market had been eagerly awaiting the White House Crypto Summit, expecting potential policy announcements that could further bolster digital asset adoption. However, in an unexpected move, President Donald Trump preempted the event by signing an executive order establishing a Strategic Bitcoin Reserve and US Digital Asset Stockpile.

While initially perceived as a bullish development for Bitcoin, the market reaction followed a classic “sell the news” pattern. BTC, which had been trading near $90,000, saw an immediate drop to $85,000, catching many traders off guard, especially those who had positioned for a more positive market response at the upcoming summit.

Market Response: Volatility Spikes and Liquidations

The sharp downturn in BTC led to a wave of liquidations, with 157,523 traders liquidated in the past 24 hours, amounting to $533.62 million in total liquidations, according to Coinglass. Despite the pullback, Bitcoin remains in positive territory on a weekly basis, posting a 10.27% gain over the past seven days.

Ethereum, however, continues to struggle. Santiment reported that ETH sentiment has hit year-low levels, as the asset has underperformed compared to other major cryptocurrencies. Despite the bearish sentiment on social media, analysts suggest that this could signal a potential turnaround once overall market conditions stabilize.

The Uncertainty Behind Trump’s Bitcoin Strategy

The knee-jerk reaction in the market appears to stem from the realization that, while the Strategic Bitcoin Reserve is a long-term structural move for digital assets, no immediate budget has been allocated for additional BTC purchases.

The Reserve will be initially capitalized using Bitcoin already held by the U.S. government, primarily from criminal and civil forfeitures—a detail that tempered enthusiasm. However, the Secretaries of Treasury and Commerce have been authorized to explore budget-neutral strategies for acquiring additional Bitcoin in the future, provided that taxpayer costs remain unchanged.

Analysts from QCP Capital noted that expectations for a major BTC accumulation event were likely overestimated. Instead, the market is now shifting its focus to the White House Crypto Summit scheduled for later today, though expectations have been significantly lowered following Trump’s preemptive action.

Beyond the crypto-specific policy shifts, macroeconomic factors remain in play. The market is now eyeing tonight’s Non-Farm Payroll (NFP) data, which could introduce further volatility. Given the fragile state of equities, any unexpected data in the report could spark reactions across risk assets, including crypto.

As Bitcoin continues to trade around $88,921, with a 2.68% surge in the last 24 hours, traders remain cautious. While Trump’s move confirms a long-term commitment to crypto at the federal level, its immediate impact on BTC price remains uncertain as the market digests broader economic and policy signals.

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