The US stock market has been experiencing volatility, with consumer confidence in the economy plummeting and concerns about a potential recession growing. Amidst this uncertainty, the cryptocurrency industry was hoping that President Donald Trump’s executive order establishing a federal Bitcoin reserve would provide a boost to the blockchain ecosystem. However, the order has had a lackluster impact, with Bitcoin’s value dropping sharply and one crypto-focused hedge fund founder describing it as “the most underwhelming and disappointing outcome we could have expected for this week.”

In January, Trump announced that he would sign an executive order to establish a crypto stockpile, which led to a surge in Bitcoin’s price, reaching an all-time high of over $109,000. However, following the release of the executive order, Bitcoin’s value fell by around five percent to $85,000,recovering slightly to around $88,000, still a nearly 20 percent decline from its January high.

‘Just a fancy title for Bitcoin holdings that already existed’

Much of the underwhelming reaction to the executive order stems from the fact that the reserve will be using shares already owned by the government, obtained through seizures or civil asset forfeitures. Although the order leaves the door open to possible government Bitcoin purchases in the future, it was not the outcome that the crypto industry was hoping for. White House crypto czar David Sacks clarified that the executive branch is only “authorized to develop budget-neutral strategies for acquiring additional Bitcoin, provided that those strategies impose no incremental costs on American taxpayers.”

Charles Edwards, founder of the crypto-focused hedge fund Capriole Investments, expressed his disappointment, stating, “This is the most underwhelming and disappointing outcome we could have expected for this week. No active buying means this is just a fancy title for Bitcoin holdings that already existed with the Govt. This is a pig in lipstick.” The executive order also calls for a “US Digital Asset Stockpile” for other crypto tokens, including Ether, XRP, Solana, and Cardano.

Potential conflicts of interest

Crypto industry executives, including Coinbase CEO Brian Armstrong, are holding a summit at the White House to discuss future regulatory enforcement. However, concerns have been raised about potential conflicts of interest, given Trump’s stake in crypto, including memecoins and a stake in the crypto platform World Liberty Financial, which reportedly bought over $20 million worth of cryptocurrencies ahead of the White House summit. Analysts believe that the market needs a reason to become bullish again, such as a clearer pro-crypto regulatory policy or signs that the US Federal Reserve plans to cut interest rates.

Trump has been courting the crypto industry, pledging to create a federal crypto reserve and make America “the crypto capital of the planet.” However, his personal stake in crypto has raised alarms about potential conflicts of interest. First Lady Melania Trump also has a stake in crypto, with her memecoin currently down 90 percent from its all-time high. The crypto industry is waiting for clearer guidance on regulatory policies and enforcement, which could provide a much-needed boost to the market.