Bitcoin’s drop on Monday, after President Donald Trump signed an executive order to establish a strategic bitcoin reserve for the US, might have been misinterpreted.
This is according to Nigel Green, CEO of global financial advisory deVere Group.
Prices slipped as much as 6,5% before recovering most losses, with bitcoin settling around $82 050 by early morning trading in London. Other major cryptocurrencies also saw volatility, though ether and XRP rebounded from initial declines.
But, instead of a reason for concern, this should be seen as a pivotal moment for digital assets, Green says.
“The market’s reaction betrays a short-sightedness that will likely be corrected as investors digest the broader implications of the move.
“In our opinion, investors should be focusing on that this executive order makes it more likely Bitcoin will be a geopolitically significant asset in the future,” he adds.
“For years, Bitcoin advocates have argued that it would evolve beyond a speculative asset into a cornerstone of sovereign financial reserves. That vision is now being actively realised.
“By establishing a strategic reserve, the US has legitimised Bitcoin’s status in global finance. While the immediate disappointment stems from the fact that the government isn’t purchasing additional bitcoin, the more profound development is that the world’s largest economy has formally integrated the asset into its state-held reserves,” Green says.
“This is a game-changer,” he says, adding that, although the US is the first to make this move, it won’t be the last.
Other nations — particularly those seeking to hedge against dollar dominance — are now incentivised to build their own Bitcoin reserves.
“Countries with a history of accumulating alternative assets, such as gold, may view this as a cue to diversify further into digital assets. Sovereign wealth funds, central banks, and institutional investors will all take notice.”
Short-term price action rarely reflects long-term fundamentals. The knee-jerk decline in crypto markets is reminiscent of past events where investors initially reacted with fear or skepticism, only to later recognize the significance of policy shifts.
When Tesla added bitcoin to its balance sheet, when major financial institutions launched crypto services, and when the first US Bitcoin ETFs were approved, there was initial volatility. Each time, the market eventually realized the structural demand these events created.
This development also brings regulatory clarity.
“A government that holds bitcoin in reserve has a vested interest in ensuring that the asset is not only viable but also protected from draconian restrictions.
“This could accelerate the implementation of clearer, more favorable regulations. Instead of fearing the executive order, investors should consider what it signals: Bitcoin is not going away. It is being adopted at the highest levels of economic planning,” says Green.
“Bitcoin is no stranger to market overreactions,” he adds. “The tendency to trade on immediate sentiment rather than long-term implications is what creates opportunities.
“As the dust settles, the strategic reserve announcement will likely be seen as a moment of validation for bitcoin’s role in the financial system, rather than a cause for concern.”