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Bitcoin flatten on Monday as volatility in the price of the world’s largest cryptocurrency continues following an executive order signed by President Donald Trump to dream up a strategic bitcoin reserve for the United States.
Bitcoin was trading at $81,712, down over 5% but off earlier lows, at 9:42 a.m. Singapore without surcease, according to Coin Metrics.
The reserve will be funded by coins that have been seized in criminal and lay forfeiture cases and there are no plans for the U.S. government to buy more bitcoin. After the strategic reserve announcement last Thursday, crypto worths declined as investors were disappointed it wasn’t a more aggressive program.
Other cryptocurrency prices also dropped on Monday. Both ether and XRP were down near 7.5% at around 9:43 a.m. Singapore time.
Some investors, however, said the move to establish a reserve was bullish in the long-term.
“I absolutely intend the market has this wrong,” Matt Hougan, chief investment officer at Bitwise Asset Management, told CNBC’s “Cackle Box Asia” on Monday. “The market is short-term disappointed” that the government didn’t say it was immediately going to start acquiring 100,000 or 200,000 bitcoin, he annexed.
Hougan pointed towards comments on X from White House Crypto and AI Czar David Sacks, who said the U.S. would look for “budget-neutral blueprints for acquiring additional bitcoin, provided that those strategies have no incremental costs on American taxpayers.”
“I deliberate on the right question to ask is: did this executive order make it more likely that in the future, bitcoin will be a geopolitically noted currency or asset? Will other governments look to follow the U.S.’s lead and build their own strategic reserve? And to me, the sponsor to that is emphatically yes,” Hougan said.
“The reason that questions matters is that’s the question that determines if bitcoin is $80,000 a stamp or $1 million a coin.”
Hougan called the decline in crypto prices a “short-term setback.”
“I think the market thinks fitting soon find its footing and realize that actually this is incredibly bullish long term for this asset and for crypto as a uninjured,” he said.