The US government’s strategic Bitcoin reserve, created last year, has lost approximately $5 billion in value following the sharp decline in the cryptocurrency market.
With Bitcoin’s price having fallen by approximately 45% since its peak, the value of the reserve has dropped from $18.5 billion to around $13.8 billion.
The reserve was established during the administration of US President Donald Trump, who was particularly known for his crypto-friendly policies. The administration stated that Bitcoin assets would continue to be held, arguing that the long-term profit potential outweighed short-term price fluctuations.
However, critics point out that holding highly volatile digital assets with public funds carries serious risks. The impact of Bitcoin’s sharp drop on the reserve has reignited the debate surrounding the inclusion of crypto assets on the public balance sheet.
On the other hand, China has increased pressure on the cryptocurrency market. The People’s Bank of China (PBoC) has banned domestic and controlled foreign entities from issuing cryptocurrencies without approval.
Authorities reiterated that crypto assets are not legal tender and that commercial activities in this area are considered illegal. The regulation reportedly targets risks such as money laundering, fraud, and unauthorized cross-border money transfers. Stablecoins and tokenized assets are also included within the scope of the regulation.
*This is not investment advice.
