Trump’s Bitcoin Reserve Plan Marks a ‘Watershed Moment’ Despite Market Jitters, Say Analysts

K33 analysts argue the U.S. Strategic Bitcoin Reserve is still a game-changer, even as recession fears shake markets.

Bitcoin may be struggling, but analysts at K33 Research insist that President Donald Trump’s plan for a U.S. Strategic Bitcoin Reserve remains a major milestone, not a "nothing burger." Even as recession worries resurface, sending crypto and stock prices tumbling, they argue that the move is a crucial step toward legitimizing Bitcoin as a global store of value.

Crypto Markets Under Pressure, But Bitcoin Holds Its Ground

Market turmoil has intensified this week, with relentless selling in both crypto and equities. On Tuesday, Bitcoin plunged to a new yearly low of $76,555, while Ether (ETH) dropped to $1,775 - its lowest level since November 2023. The ETHBTC ratio has also sunk to levels not seen since December 2020, highlighting Ether’s underperformance.

Meanwhile, the GMCI 30 index, which tracks the top 30 cryptocurrencies, has tumbled 26% since the start of the year, now sitting at 134.92.

K33 analysts Vetle Lunde and David Zimmerman pointed out that Trump appears unfazed by the risk of a recession, instead focusing on lowering U.S. 10-year yields to help the government manage refinancing needs. However, ongoing uncertainty around his shifting tariff policies has contributed to stock market declines, with the S&P 500 and Nasdaq hitting their lowest points since mid-September.

Despite the downturn, Bitcoin has remained in positive territory since the presidential election, showing a 13% gain - outperforming the negative returns seen in the S&P 500 and Nasdaq. Analysts attribute this resilience to Trump’s strong follow-through on his crypto promises, including the formation of a crypto working group and last week’s announcement of the U.S. Strategic Bitcoin Reserve.

The Strategic Bitcoin Reserve: A Turning Point?

Some market observers have blamed Bitcoin’s recent selloff on an underwhelming reaction to the reserve announcement, but K33 analysts strongly disagree.

"This reserve is a watershed moment for Bitcoin," Lunde and Zimmerman wrote in their latest report. "It represents a significant step toward solidifying BTC’s role as a global store of value, despite current price action being dictated by broader market forces. While uncertainties linger, we see the current price levels as a strong long-term buying opportunity."

How Will the U.S. Acquire More Bitcoin?

Trump’s executive order, signed on March 6, established the U.S. Strategic Bitcoin Reserve using approximately 200,000 BTC ($17 billion) already in federal possession due to asset forfeitures. However, after returning a portion to crime victims, the initial reserve is expected to hold around 103,500 BTC. Notably, 94,636 BTC seized from the Bitfinex hackers will likely be returned to the exchange.

The order also tasks Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick with devising budget-neutral strategies for acquiring additional Bitcoin without imposing extra costs on taxpayers.

While specifics on these acquisition strategies remain scarce, the analysts expect more clarity by May 5, when Bessent is due to present an evaluation of legal and investment considerations. Potential approaches include utilizing surplus funds from the U.S. Treasury Exchange Stabilization Fund, selling IMF-issued special drawing rights, or revaluing gold certificates.

A Shift in Global Bitcoin Policy?

One of the most significant elements of Trump’s order is the U.S. government’s decision to stop selling seized Bitcoin. Instead of liquidating confiscated assets, officials are now considering ways to accumulate more - a move that could inspire other nations to follow suit.

"The most influential global superpower has just signaled an end to selling seized Bitcoin and is actively looking to acquire more," K33 analysts wrote. "This marks a potential turning point for Bitcoin’s global adoption and could encourage other governments to rethink their approach."

As discussions around national Bitcoin reserves gain traction, Senator Cynthia Lummis has reintroduced legislation to formally establish a U.S. Bitcoin reserve.

With recession fears looming and markets in flux, the long-term impact of Trump’s Bitcoin strategy remains uncertain. But one thing is clear: the U.S. is taking Bitcoin more seriously than ever before.