By Key Points
- US Bitcoin Reserve Sparks $370M ETF Outflows.
- Investors were disappointed by the lack of direct BTC purchases.
- Bitcoin’s price and futures market dropped over 2% on March 7.
- Experts see long-term potential despite short-term sell-off.
Bitcoin exchange-traded funds (ETFs) experienced a sharp $370 million net outflow on March 7. The reason? According to data from Farside Investors, President Donald Trump’s executive order established a US Strategic Bitcoin Reserve.
However, the announcement wasn’t what traders had hoped for. Instead of the government actively buying Bitcoin, the order outlined a reserve funded by assets seized through law enforcement actions. The lack of fresh BTC purchases left many investors unimpressed, triggering sell-offs in ETFs and spot markets.
📉💰 “US Bitcoin Reserves Spark $370M ETF Exodus: Farside Report”https://t.co/Dgtd6dBnYg
Bitcoin ETFs saw a $370M outflow after Trump’s proposal for a strategic Bitcoin reserve. Despite the market’s initial disappointment, this could introduce a new buyer into the Bitcoin… pic.twitter.com/zmQttU7Jpz
— Crypto Update IO 🚀 (@cryptoupdate_io) March 8, 2025
Alvin Kan, COO of Bitget Wallet, noted that while the order acknowledges Bitcoin’s role in global finance, it failed to introduce any immediate buying pressure. This led to an overall negative reaction from institutional investors, who pulled their funds from Bitcoin ETFs.
Trump’s decision aligns with his broader crypto-related strategies, which have sparked discussions about Bitcoin’s future in US financial policy. Some analysts suggest that this reserve could mirror the 2017 rally, similar to how trade policies at the time influenced Bitcoin’s price. Read more on that here.
The end game was never “the U.S. government buys all of the world’s bitcoin.”
A U.S. Strategic Bitcoin Reserve means…
– Other countries will buy bitcoin
– Wealth managers have no excuse
– Financial institutions have no excuse
– Pensions/Endowments have no excuse
– Fear of the… https://t.co/iAoyeo3PYL— Ryan Rasmussen (@RasterlyRock) March 7, 2025
Bitcoin Price Drops, But Experts Remain Optimistic
Bitcoin’s spot price dipped over 2% following the announcement, while futures markets on the Chicago Mercantile Exchange (CME) also saw a downturn.
The market reaction followed a classic “buy the rumor, sell the news” pattern, where anticipation drives prices up before an underwhelming announcement triggers a sell-off.
Despite the short-term negativity, some experts see long-term bullish potential. Ryan Rasmussen, Head of Research at Bitwise, noted that the US Bitcoin Reserve could push other countries and financial institutions to increase their BTC holdings.
Morningstar’s Bryan Armour also pointed out that while Trump’s executive order didn’t involve direct purchases, it leaves the door open for future acquisitions—so long as they don’t increase taxpayer costs. This means the US government could become a major Bitcoin holder, influencing global crypto adoption.
What in the American communist hell is this?😳
Trump just signed an executive order saying ONLY the President or the Attorney General can interpret the law. No agencies, no regulators—just him and his handpicked AG.pic.twitter.com/HulM3dGSy2
— Mario 🇺🇸🇵🇱🇺🇦🇪🇺 (@PawlowskiMario) February 19, 2025
In contrast, Ethereum sentiment has been hitting new lows, showing a broader cautious approach in the market. Investors have been pulling back on ETH, and you can read more about it here.
Institutional Investors Are Watching the Crypto Market Closely
With Bitcoin facing ETF outflows and Ethereum sentiment turning bearish, institutional investors are now analyzing their next move. While some large-scale investors remain cautious, crypto whales are actively buying select altcoins, which could indicate shifts in market strategy. If you’re curious about which altcoins are attracting whale attention, check out our detailed breakdown here.
Additionally, the crypto industry is seeing debates over Layer 1 and Layer 2 solutions, especially after Binance’s CZ weighed in on the topic. These discussions could shape the next phase of blockchain development. Dive into the details here.
For now, the market remains cautious, but the bigger picture suggests that Bitcoin’s role in global finance is only getting stronger.
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