Key Insights:
US President Donald Trump signed an Executive Order creating the Bitcoin Strategic Reserve to hold existing Bitcoins with the US Government.
Markets sank 6% following the news that no additional Bitcoin purchases will take place by Federal Government.
However, the fall quickly recovered after markets understood the positive impact of the reserve.
Independent US State Reserves and other countries following suit would create several more Bitcoin reserves, generating a much higher demand.
As soon as the executive order was made public, there was a sharp selloff in the markets that plunged the prices of Bitcoin from $87k levels to $85k levels. However, as the markets evaluated the positive side of the action, prices began to recover and even touched $90k levels. At press time, Bitcoin traded at a price of $89.2k.
Bitcoin's Price in the Last 24 Hours
CoinMarketCap
There seems to be ongoing accumulation in the markets from institutions like governments and large corporates.
El Salvador President Nayib Bukele announced that his country would continue to buy Bitcoins despite the IMF objecting to the purchases.
Further, several new companies have emerged like Metaplanet, and Riot Platforms, that could have already been accumulating. Finally, large digital giants such as GameStop have been considering Bitcoin as an investment to help manage their large cash pile. The company is sitting on a $4.5 billion cash reserve.
The Federal Bitcoin Reserve by the US Government is unlikely to be the only one holding Bitcoins. As many as 25 states in the USA have already established their own independent Bitcoin reserves. Most of them are likely to start purchasing Bitcoins to fill those reserves soon.
Other countries too are likely to follow the example set by the USA, El Salvador, Abu Dhabi, and Bhutan, all of whom own thousands of Bitcoins in their reserves. The USA owns roughly 200k Bitcoins valued at $20 billion, El Salvador owns 6,077 Bitcoins, valued at $600 million and Bhutan owns 7,500 Bitcoins valued at roughly 750 million. Abu Dhabi, an Emirate within the UAE owns 4599 Bitcoins.
Other countries too could start their own Bitcoin reserves following the El Salvadorean model of accumulating Bitcoin in a phasewise manner.
Crypto markets earlier expected a sell-the-news event where a Federal Bitcoin Reserve would trigger the sale of BTC in the open markets as sellers looked to cash out on their profits, accumulated since October 2025.
However, opposite to the expectations, the newly created Bitcoin reserve by the US federal government will only hold existing BTC. It may sound odd, but it successfully prevented a sell-off in the market.
Bitcoin, which fell down to $85k levels today soon saw a re-bound rally to $90k levels. Market experts were otherwise expecting a sell-off to $70k levels.
Crypto executives now hope for a new ATH by June 2025.
Coinbase CEO and co-founder Brian Armstrong expects Bitcoin to reach new high as the US Bitcoin Reserve would force several G20 countries like France, India, Germany, and others to follow suit.
Bitwise Head of Research Ryan Rasmussen, now thinks that institutions will have no bounds to acquire Bitcoin for their clients and customers. He further adds that there would be far less risk of US selling Bitcoins, and countries banning it.
Swan Bitcoin CEO Cory Klappsten thinks Bitcoin would shed its sideways momentum soon and has a more than 50% chance that there is a new ATH soon.
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