Investors’ response to President Trump’s proposal for a strategic US Bitcoin reserve resulted in net outflows of almost $370M from Bitcoin ETFs.
Following traders’ disappointment with Trump’s March 6 executive order, which established a national Bitcoin reserve but did not direct the government to purchase Bitcoin, the outflows show that institutional investors are cautious about Bitcoin exposure.
Bitget Wallet’s chief operating officer, Alvin Kan, said the markets were disappointed by the lack of new purchases, even though Trump’s executive order recognizes the role of cryptocurrency in global finance.
US Bitcoin Reserve Announcement
President Trump issued an executive order on March 6 establishing a strategic US Bitcoin reserve of Bitcoin and a digital asset stockpile to hold additional cryptocurrencies separately.
At first, they will both consist of assets obtained through legal actions and law enforcement.
According to the directive, authorities must create budget-neutral plans for obtaining more bitcoin, as long as those plans don’t result in additional expenses for American taxpayers.
Temujin Louie, CEO of Wanchain, a cross-chain interoperability protocol, stated that the company’s narrow scope fell short of market expectations and resulted in considerable disappointment.
Bryan Armour, director of passive strategies research at Morningstar, said that Trump’s order opens the possibility of acquiring additional Bitcoin as long as the acquisitions don’t cost taxpayers.
Market Reaction To Announcement
Google Finance data shows that on March 7, the spot price of Bitcoin fell more than 2%. According to data from the CME, the enormous derivatives exchange in the US, most of Bitcoin’s forward curve, consisting of futures contracts with staggered expiration dates, has seen a more than a 2% decline.
Standardized contracts, or futures, signify a commitment to purchase or sell an asset at a specific future date.
Even without active Bitcoin purchases by the US government, the US Strategic Bitcoin Reserve means Other nations will purchase Bitcoin. Ryan Rasmussen, head of research at Bitwise and an asset manager, stated in an X post that financial institutions have no excuse for not adding Bitcoin allocations.
According to Altcoin Daily co-founder Austin Arnold, the sell-off is just buying the rumor and selling the news event; This is bullish in the long run.
