People thought that the U.S. Strategic Bitcoin Reserve (SBR) news would completely change the price of Bitcoin and start a bullish rise. But instead of going through the roof, BTC dropped by $5,000, which made many traders and investors scratch their heads. Donald Trump signed the SBR into law on March 6, 2025. It differs from Sen. Cynthia Lummis’s original plan because it will use seizures and forfeitures to buy Bitcoin instead of public money. Considering such important news, why did Bitcoin’s price drop? Scott Melker, who runs the show Wolf of All Streets, broke it down. He said the drop was expected and might be good in the long run.
Initial Disappointment
The market’s expectation of instant large-scale BTC purchases was a big reason Bitcoin’s price dropped. Many traders thought that the U.S. government would start buying Bitcoin in large amounts after the SBR launch, which would pressure people to buy. As soon as it became clear that the reserve would not involve buying things directly with public money, people quickly changed their minds, which caused a sell-off. Melker says that people had the wrong assumptions about what the reserve would do in the long run.
Bitcoin as Strategic Asset
Even though the price dropped in the short term, Melker stressed that the SBR is essential in Bitcoin’s history. The U.S. government has officially accepted Bitcoin as a strategic asset by setting up a reserve only for BTC. The Digital Assets Stockpile holds ETH, ADA, SOL, and XRP. The SBR, on the other hand, only holds Bitcoin, making it even more unique. Melker said this move could make other countries want to do the same, which would start a global race to buy Bitcoin, driving prices much higher in the long run.
Liquidity and Leverage Flush
A lack of buyers and sellers in the market that suddenly got a lot of big news was another technical reason why the price dropped, according to Melker. Because the market isn’t very liquid when a big announcement like the launch of SBR happens, leverage traders often lose all their money, causing weak hands to sell.
Conclusion
Some buyers were upset that the U.S. government isn’t buying Bitcoin directly, but the SBR’s creation is still a huge step forward. It shows that big businesses are on board with Bitcoin and make it possible for people to acquire more of it in the future. “Other nations won’t let the U.S. be ahead in the Bitcoin game,” says Melker.
