US President Donald Trump has signed an executive order to establish a “Strategic Bitcoin Reserve” using cryptocurrency seized by the federal government.

The reserve will consist of bitcoin obtained through criminal and civil asset forfeitures, with no current plans for new government purchases.

A separate “US Digital Asset Stockpile” will hold other seized cryptocurrencies, also without plans for additional acquisitions.

Following the announcement, bitcoin prices dropped 5% to US$85,000 before recovering to US$89,200, as investors were disappointed by the lack of new government buying.

Experts see the move as symbolic, recognizing bitcoin as a government asset but leaving acquisition details uncertain.

Concerns have also emerged about Trump’s crypto ties, as his family has launched projects in the space, and he holds assets in World Liberty Financial. White House officials claim his business interests are under ethics review.