On March 7, Bitcoin $86,161 exchange-traded funds (ETFs) experienced a net outflow of approximately $370 million. This movement is linked to investor caution following President Trump’s announcement regarding the U.S. plan to create a strategic Bitcoin reserve. As a result, Bitcoin’s spot price dropped by over 2%, with market analysts highlighting that uncertainties surrounding the regulation are increasing short-term volatility.
Trump’s Bitcoin Reserve Plan and Regulation Details
The regulation signed on March 6 officially outlines the U.S. goal of establishing a national Bitcoin reserve. The plan anticipates that cryptocurrencies seized through legal actions and law enforcement will be transferred to this reserve. Additionally, the regulation includes a stipulation to strengthen the reserve without imposing extra financial burdens on taxpayers.
Alvin Kan, Operations Manager at Bitget Wallet, pointed out that the government’s lack of direct purchasing has disappointed the market. Temujin Louie, CEO of Wanchain, noted that the limited scope of the regulation fails to meet expectations. Experts suggest that the long-term effects of the reserve will only become clear if explicit policies are defined.
Market Turmoil and Expert Opinions
The outflows from ETFs negatively impacted Bitcoin prices and the futures market as well. Market data indicate that investors’ risk perception has increased, triggering selling pressures due to regulatory uncertainties. Ryan Rasmussen, Chief Research Officer at Bitwise, suggested that similar strategies might be developed by other countries, stating, “This could increase global financial institutions’ interest in Bitcoin.”
However, some analysts believe that the current volatility is temporary. It is argued that the reserve plan could strengthen the U.S.’s position in the cryptocurrency market and renew institutional investor confidence. On the other hand, warnings have been issued that if ETF outflows continue, further price declines may occur.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.