Trump's Bitcoin strategy stockpile announcement plunges the market

Bitcoin rose to $95000 the day before, but plunged to the $80000 range in a single day. Bitcoin once fell to $82467.24.

U.S. President Donald Trump's announcement that his administration will begin a strategic stockpile of five virtual assets, including Bitcoin, has sparked a strong reaction in the market, with the price of Bitcoin falling sharply by 9% in a single day.

According to CoinMarketCap on the 4th, Bitcoin is currently trading at $83,861.58, showing a decrease of 9.49% over the past 24 hours.

Bitcoin had reached the $95,000 level the previous day, but with the announcement of the strategic stockpile and the subsequent impact on the derivatives market, it plunged to the $80,000 range. At one point, the price touched $82,467.24.

The Bitcoin Fear Greed Index by Alternative also fell from 33 the previous day to 15 on the 4th.

The index, which remained in the "extreme fear" section last week, recovered to the "horror" section with President Trump's announcement, but it seems to have decreased again with the increase in market uncertainty.

With the decrease in the price of Bitcoin, there has been a massive liquidation of long positions in the derivatives market.

According to CoinGlass, as of 08:00 on the 4th, Bitcoin's long positions have been liquidated by $931.87 million in the past 24 hours.

The liquidation of long positions in the derivatives market is a factor that can further accelerate the downward movement of Bitcoin prices.

On the other hand, altcoins, which were also included in President Trump's strategic stockpile plan, also showed a steeper decline compared to Bitcoin.

Ethereum is currently down 14.42% at $2,085.94, which is a lower price compared to before President Trump's announcement of the strategic stockpile.

In particular, the price ratio of Ethereum to Bitcoin has fallen to 0.02485, reaching the lowest level in about five years since June 2020.

The ratio has been steadily decreasing since Ethereum switched to Proof of Stake (PoS), and it seems to have fallen further due to the recent widening price gap with Bitcoin.

Bitcoin Dominance has risen by about 5.76% this year, according to TradingView.

Along with Bitcoin and Ethereum, 'U.S. Coin', which was considered a strategic stockpile target, also plunged.

XRP and Solana have plummeted 17.51% and 20.13% to trade at $2.30 and $135.92, respectively.

Cardano (ADA), which surged the previous day, has decreased by 25.20% to $0.7980.

President Trump's implementation of tariff policies is being cited as the reason why virtual assets have turned weak in a day.

President Trump said on the 3rd (local time) that he would impose 25% tariffs on Canada and Mexico as planned and also signed an executive order to apply a 20 percentage point tariff increase to China, thereby increasing the tariff rate by 10 percentage points.

"Trump's announcement of his Bitcoin strategy stockpile is significant, but the reason why expectations for this have faded is that the market seems to have quickly declined due to bad macros such as tariff policies," explained Choi Yoon-young, head of the Covit Research Center.

"In the future, policy issues and macros are expected to affect the market price of virtual assets with two tracks."

However, there are concerns in the market about whether Trump will really be able to implement the Bitcoin strategy stockpile.

Especially, there is a lot of opposition to the decision to include altcoins, not Bitcoin, in the strategic reserve.

Bernstein researchers pointed out in a report on the 3rd (local time) that "it would be possible to persuade Congress with the logic of readjusting the gold strategic reserve because Bitcoin is digital gold."

They added, "It seems difficult for Congress to accept the idea of stockpiling other virtual assets using U.S. Federal Reserve funds or state funds."

At the same time, there are concerns about conflicts of interest of David Sax, White House Virtual Assets Policy Director (Crypto Tsar).

This is because Kraft Ventures, where Sax remains a partner, is investing in Bitwise, which has released financial products related to virtual assets.

Kraft Ventures has been investing in Bitwise since 2017. It is still showing Bitwise in its portfolio.

In response to the controversy, Sax stated in his X post that he sold all of his virtual assets, including Bitcoin, Ethereum, and Solana, before taking office.

However, even if he did not personally hold any virtual assets, some say that Kraft Ventures has a stake in virtual asset startups, so he