On Friday, President Trump signed an executive order directing the creation of a working group to draft a regulatory framework for cryptocurrencies within six months. While the move signaled the White House’s acknowledgment of the growing importance of crypto, it fell short of confirming plans for a national Bitcoin reserve—a promise Trump made during his campaign.
Now, three days later, investors see Bitcoin sliding as far down as $98,000 on sunday, only starting its recovery this morning. How did the U.S.’s crypto strategy cause such a backlash in the crypto market?
A Crypto-Friendly Shift in the White House
Once a vocal crypto skeptic, President Trump’s views on digital assets evolved significantly during his campaign, influenced by the industry’s growing engagement in political processes through donations. His vision to transform the U.S. into the global hub for cryptocurrencies was reinforced with the appointment of venture capitalist David Sacks as the AI and crypto head in December.
The market reacted cautiously. Although Bitcoin surged over 50% following Trump’s election victory in November, the lack of an immediate commitment to building a Bitcoin reserve disappointed some stakeholders. According to Sean McNulty, head of APAC derivatives at FalconX, “Anything short of a Bitcoin reserve that immediately started buying BTC was going to disappoint.”
Memecoins and Political Theater
The crypto-friendly stance of the Trump administration was on full display in January as both Trump and First Lady Melania launched their own meme coins. While the tokens quickly became a topic of intrigue, their volatile nature left many questioning the administration’s broader crypto agenda.
Justin d’Anethan, head of sales at token advisory firm Liquifi, described the market’s current state as “catching its breath” following several bullish developments, including regulatory appointments and ETF product filings.
Global Reactions and Market Ripple Effects
While the U.S. charts its crypto future, ripple effects are felt globally. Asian stocks rose modestly on Monday, despite new tensions stemming from punitive sanctions ordered by Trump on Colombia over deportation disputes. Meanwhile, concerns about an AI breakthrough from China’s DeepSeek disrupting global markets added another layer of complexity to the financial landscape.
Jonathan Yark, a senior quant trader at Acheron Trading, noted that fears of technological disruption have “cascaded across futures and into digital assets,” underscoring the interconnectedness of crypto markets with global events.
What’s the Next U.S.’s Crypto Strategy?
While the executive order fell short of expectations for an immediate Bitcoin reserve, the formation of a working group signals a step toward regulatory clarity. Over the next six months, the group will evaluate the feasibility of a national crypto stockpile while addressing pressing concerns like security, market volatility, and potential technological dominance by foreign powers.
For investors, this moment offers a mixed bag of opportunity and caution. The U.S. government’s engagement with digital assets is a powerful endorsement of the sector’s legitimacy, but the absence of immediate action keeps uncertainty alive. As McNulty aptly summarized, “The market got 90% of what it wanted. It’s the 10% that matters.”
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