Trump signed an executive order for a national Bitcoin strategic reserve, why did the market instead plummet?
Policy implemented but coin price plummets
This morning, Trump suddenly signed an executive order to create a national Bitcoin strategic reserve. Normally, such big news should lead to a surge, but Bitcoin plummeted from $90,000 to $85,000 within an hour (and has now bounced back to $88,000). This is a typical 'good news fully priced in' scenario, and some people may have taken the opportunity to cut losses and flee.
The Bitcoin in this national treasury all comes from 'seizing assets'—for example, Bitcoin from government confiscations in cases of black market activities, money laundering, etc. The official stance is not to sell the inventory coins, but they also won't spend money to buy new coins, which is equivalent to building a reserve with 'free' coins, indeed not costing taxpayer money.
Although in the long term, hoarding coins is a positive, the short-term plunge indicates two points:
Either the big players are using the news to offload their holdings
Or the market feels that 'just hoarding without buying' indicates no actual increase in demand
The rebound to $88,000 indicates that there are still people betting on future policy dividends.