Trump builds up Bitcoin reserves, but Bitcoin plummets! What's going on?

Insights: The positive news was not as expected, and Bitcoin plunged in the short term.

Bitcoin plunged in the short term, falling below $85,000 during the session. Then it quickly rose again, with the latest quotation of $87,400.

According to Coinglass data, more than 150,000 people had their positions liquidated in the past 12 hours, with a liquidation amount of $540 million.

On the news, David Sacks, the White House's cryptocurrency director, said that US President Trump had signed an executive order to establish a strategic Bitcoin reserve.

The strategic reserve will be capitalized with about 200,000 bitcoins owned by the federal government, and the government will not purchase additional assets for the reserve except for assets acquired through asset confiscation procedures.

This is different from what the currency circle expected. Previously, the market expected the Trump administration to buy cryptocurrencies, but now it seems to be just "storage", which disappointed people.

"This is the most disappointing result this week," said Charles Edwards, founder of hedge fund Capriole Investments. He believes that without a purchase plan, the strategy is useless.

Some people are optimistic. Matt Hougan, chief investment officer at Bitwise Asset Management, said the move to set up a Bitcoin reserve reduces the probability of the government trying to ban the asset and greatly increases the likelihood that other countries will establish strategic Bitcoin reserves.

The market is waiting for the upcoming White House cryptocurrency summit, during which Trump is expected to announce more details of the crypto reserve.