Last updated on March 11th, 2025 at 09:00 am
The U.S. Strategic Bitcoin Reserve, established by President Donald Trump, has failed to generate the anticipated market rally, according to a new report from crypto exchange Bybit and analytics firm Block Scholes.
In a March 7 announcement on his official X account, White House AI and Crypto Czar David Sacks revealed that the reserve would be funded using Bitcoin seized through federal asset forfeitures, ensuring no cost to taxpayers. He estimated that the U.S. government holds approximately 200,000 BTC, although no full audit has been conducted.
Following Trump’s announcement, spot prices of some cryptocurrencies experienced a brief uptick. However, funding rates remained stable, falling short of extreme levels. Analysts noted that the market’s response lacked the intensity seen before Trump’s inauguration, suggesting traders remained cautious despite the positive news.
Furthermore, the report indicated that bearish sentiment persisted, driven by a declining S&P 500 and growing skepticism surrounding major cryptocurrencies like Ethereum (ETH) and Solana (SOL). As enthusiasm faded, traders increasingly turned to short-term protective options to hedge against potential risks amid evolving market conditions. Additionally, the report noted a decline in open interest for Solana options at the end of February despite SOL being included in the reserve. While most new positions favoured call options, trading activity remained lacklustre.
According to Matrixport analysts, perpetual futures funding rates remained low, consistently hovering in the single digits. This subdued response stood in stark contrast to the elevated rates observed in April and December 2024, indicating that retail investors remained largely unmoved by the creation of the strategic reserve.
Matrixport analysts also highlighted growing frustration among retail investors as both the White House Crypto Summit and the establishment of the U.S. Strategic Bitcoin Reserve failed to meet their high expectations. The muted response has raised concerns that Bitcoin’s next significant move will require a stronger catalyst to reignite investor enthusiasm.
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