Bitcoin Reserve Trick by U.S., How Do Other Countries Respond to BTC Reserve?

The Bitcoin reserve trick by the US White House crypto summit has brought great disappointment to many crypto investors.

Before the crypto summit, Bitcoin (BTC) was expected to reach a new peak, or at least stabilize. But in reality, the price of BTC plummeted after the crypto summit.

Even the Bitcoin Reserve plan that Trump relied on did not move BTC in a positive direction.

Facing such facts, how do other countries respond to BTC reserves?

Bitcoin Reserve Trick by U.S

​The recent White House Crypto Summit, led by President Donald Trump, introduced a Strategic Bitcoin Reserve aimed at bolstering the United States' leadership in the cryptocurrency sector. 

This reserve will be primarily composed of Bitcoin seized through legal actions, with no immediate plans for government purchases of additional Bitcoin.

Key Outcomes from the Summit

1. Establishment of the Strategic Bitcoin Reserve

The reserve will utilize Bitcoin already in the government's possession, acquired through criminal or civil asset forfeitures. 

Future acquisitions are to be "budget-neutral," ensuring no additional taxpayer expenses. 

2. Inclusion of Other Cryptocurrencies

Beyond Bitcoin, the administration plans to create a "Digital Asset Stockpile" encompassing other cryptocurrencies like Ethereum (ETH), Ripple (XRP), Solana (SOL), and Cardano (ADA). ​

3. Regulatory Engagement

The summit featured discussions with industry leaders, signaling a shift towards more collaborative regulatory approaches and potential future policies to support the crypto industry. ​

Market Reaction

Despite these announcements, Bitcoin's price experienced a decline, dropping over 5% in 24 hours to below $82,000. 

This downturn is attributed to investor disappointment over the government's decision not to purchase new Bitcoin for the reserve, relying instead on existing seized assets. 

Additionally, broader economic concerns, such as escalating global trade tensions, have contributed to the market's bearish sentiment.

While the summit marked a significant policy shift towards integrating cryptocurrencies into national strategy, the immediate market response was negative due to unmet investor expectations regarding new government Bitcoin acquisitions and prevailing economic uncertainties.

Why BTC Reserve is a Trick?

Many in the crypto community see the U.S. Bitcoin Reserve plan as a trick or strategic maneuver, and this is a key reason why Bitcoin’s price dropped instead of rising. 

Here’s why this move is perceived as deceptive and how it negatively impacted the market:

1. No New Demand for Bitcoin

The market expected the U.S. government to buy Bitcoin, which would have created a massive demand spike and driven prices up.

Instead, they are only using confiscated Bitcoin, meaning no fresh buying pressure is coming from the government. This removes the bullish catalyst that traders were hoping for.

2. Illusion of Support Without Real Investment

The announcement of a Bitcoin Reserve made it seem like the U.S. was actively supporting BTC as a strategic asset.

However, without actual purchases, the government is not investing in Bitcoin, just reallocating assets it already has.

This gives the impression of support for Bitcoin without real economic backing.

3. Dumping Risk – Government Could Sell Instead of Holding

If the government chooses to sell seized Bitcoin instead of holding it long-term, it could flood the market with BTC.

This creates uncertainty among investors, as the government could liquidate large amounts of Bitcoin at any time.

Fear of a potential government sell-off pressures the price downward.

U.S Aren’t Ready

The U.S. effectively used confiscated Bitcoin to make it seem like they were backing BTC without actually spending money to acquire more. 

This lack of real investment, coupled with fears of potential government sell-offs, caused Bitcoin’s price to drop instead of rising. 

The market reaction reflects disappointment that there is no fresh capital flowing into Bitcoin from the U.S. government, just a repackaging of assets they already hold.

This trick shows that while the U.S. acknowledges Bitcoin's strategic importance, they are not yet ready to truly invest in it as a national asset.

Read Also: How to Buy Bitcoin (BTC)

How do Other Countries Respond to BTC Reserve?

The U.S. Strategic Bitcoin Reserve has generated diverse responses from countries and international organizations, highlighting concerns over financial sovereignty, economic stability, and regulation. 

European Union

In the European Union (EU), finance ministers worry that the U.S.’s pro-crypto stance could undermine the eurozone’s financial system. 

As a result, discussions have intensified on accelerating the development of a digital euro to ensure the EU maintains control over its monetary policies.

The European Central Bank

The European Central Bank (ECB) has taken a cautious approach, with President Christine Lagarde firmly stating that Bitcoin will not be included in the ECB’s reserves during her tenure, which runs until 2027. 

This reflects the institution's reluctance to integrate cryptocurrency into its financial strategy. 

European Countries

Meanwhile, some European countries are actively considering whether to add Bitcoin to their national reserves. 

The United Kingdom, for instance, has been evaluating its position after authorities seized a significant amount of Bitcoin in a criminal investigation. 

Supporters argue that holding Bitcoin could serve as a hedge against inflation and strengthen the country’s role in the digital asset market.

Outside of Europe

Outside of Europe, El Salvador remains one of the few nations that have fully integrated Bitcoin into their national reserves. 

Its bold approach to cryptocurrency adoption has positioned the country as a leader in the space, potentially influencing other governments to reconsider their stance. 

However, the International Monetary Fund (IMF) has raised concerns about the lack of transparency surrounding government-held cryptocurrency reserves, warning that without proper oversight, these assets could facilitate corruption and financial crime.

The announcement of the U.S. Bitcoin Reserve initially led to a surge in Bitcoin prices, but this optimism quickly faded as the market corrected. 

Investor uncertainty over the reserve’s long-term impact and the lack of fresh Bitcoin purchases by the U.S. government contributed to price volatility. 

Ultimately, the U.S. decision to establish a Bitcoin reserve has sparked global discussions on the role of cryptocurrency in national financial systems, with some nations seeing it as a strategic opportunity while others remain cautious about the economic and regulatory implications.

Final Note

The U.S. Strategic Bitcoin Reserve was presented as a major step toward Bitcoin adoption, but in reality, it was a clever trick rather than a true commitment. 

Instead of buying Bitcoin, the U.S. government used seized BTC, creating the illusion of support without actually increasing demand. This misled investors, causing initial excitement followed by a market sell-off when the truth became clear.

Bitcoin’s price dropped because there was no new institutional buying, and fears grew that the government might sell its holdings in the future. 

Globally, the move put pressure on other countries. The EU rejected Bitcoin in its reserves, the UK is still considering its stance, and El Salvador continues its pro-Bitcoin approach. Meanwhile, the IMF warned about the risks of government-controlled crypto assets.

In the end, this was more about politics than real investment. The U.S. gave the impression of embracing Bitcoin while keeping control over it. 

This strategy temporarily influenced the market but did not provide real support, leaving Bitcoin’s long-term position uncertain.

FAQ

1. What is the U.S. Strategic Bitcoin Reserve?

The U.S. Strategic Bitcoin Reserve is a government initiative to hold Bitcoin as part of its assets, but instead of purchasing new BTC, it is using Bitcoin seized from criminal cases. This means the government is not adding fresh demand to the market, only repurposing assets it already owns.

2. Why did Bitcoin’s price drop after the Crypto Summit?

Bitcoin’s price fell because investors expected the U.S. government to buy Bitcoin, creating new demand. However, when it was revealed that the reserve would only consist of confiscated BTC and no additional purchases, investor sentiment turned negative, leading to a sell-off.

3. How is this move considered a “trick” by the U.S. government?

The U.S. created the impression that it was supporting Bitcoin, but in reality, it made no real investment. Instead, it rebranded confiscated Bitcoin as a reserve, misleading investors and manipulating market sentiment without actually backing Bitcoin with fresh capital.

4. How are other countries responding to the U.S. Bitcoin Reserve?

The EU is concerned about financial sovereignty and is accelerating its digital euro plans. The ECB refuses to hold Bitcoin in its reserves. The UK is debating its stance, while El Salvador continues to expand its Bitcoin holdings. Meanwhile, the IMF warns about the risks of governments holding crypto without transparency.

5. What does this mean for Bitcoin’s long-term future?

In the short term, this move has increased volatility and uncertainty in the market. While it shows that governments are taking Bitcoin seriously, it also suggests that they want to control rather than fully embrace it. The long-term impact depends on whether the U.S. eventually buys Bitcoin or uses its holdings as a tool for financial influence.