Cryptocurrencies took a hit Thursday night following President Donald Trump’s executive order establishing a strategic bitcoin reserve for the United States. The market reacted negatively as details of the plan revealed no immediate government purchases of bitcoin, despite prior speculation.

Bitcoin dropped 3% to $87,586.86, according to Coin Metrics, and briefly touched $84,688.13 after the news broke. Other major cryptocurrencies also slid, with Ether down 2% at $2,184.08, Solana (SOL) declining by 3%, and Cardano (ADA) tumbling 13%. The losses dampened optimism from earlier in the week when Trump's remarks about including cryptocurrencies in national strategy had driven rallies.

White House crypto and AI czar David Sacks clarified that the bitcoin reserve will consist of BTC already owned by the U.S. government—seized in past law enforcement actions. He emphasized that this approach would “not cost taxpayers a dime.” Currently, the U.S. government holds over 198,000 bitcoins worth around $17 billion, according to Arkham.

The “digital asset stockpile” outlined in the executive order will include cryptocurrencies forfeited in criminal or civil proceedings, but the administration has no plans to acquire additional assets beyond those obtained through legal means. Data from Arkham indicates the U.S. government holds about 56 Ether tokens, worth approximately $119 million, but no notable reserves of XRP, Solana, or Cardano.

Investor disappointment stemmed from the absence of new purchases, which many had anticipated. Market analysts had expected near-term buying pressure from the government’s involvement, but Trump’s order only laid the groundwork for potential future acquisitions. Steven Lubka, head of private clients at Swan Bitcoin, noted that while the news was “positive long-term,” it did not meet short-term market expectations.

Sacks highlighted that the Secretaries of Treasury and Commerce have been authorized to explore “budget-neutral strategies” for acquiring more bitcoin, as long as it does not impose additional costs on taxpayers. However, no definitive acquisition plan has been confirmed.

The announcement came just ahead of the White House Crypto Summit and days after Trump teased more details on the initiative during his campaign. Despite the anticipation, broader market concerns overshadowed the news. Ongoing economic uncertainty, a tariff war, and inflation worries contributed to a cautious market sentiment. JPMorgan analysts stated that they do not expect significant upward momentum in crypto prices in the near term given these macroeconomic challenges.

Earlier this week, Bitcoin briefly surged past $90,000, but it has since struggled to hold that level. Analysts warn that unless BTC can sustain itself above this psychological threshold, a deeper pullback toward $70,000 remains a possibility.