QCP Capital: The market's expectations for the White House crypto summit have cooled down, and the focus has shifted to tonight's non-farm employment data

In a message from ChainCatcher, QCP Capital's latest analysis pointed out that as the market anticipates the White House cryptocurrency summit, Trump has signed an executive order in advance to establish a "Strategic Bitcoin Reserve and U.S. Digital Asset Reserve". Although this move is generally expected to be beneficial for Bitcoin, the market showed a typical "sell on news" reaction with Bitcoin prices falling from $90,000 to $85,000 after signing.

The timing of the signing was unexpected by the market, especially those investors who had built positions expecting more optimistic results from the summit. Volatility dropped significantly and risk reversal once again turned towards put options; previous bullish positions were quickly closed.

The sharp drop in the market may stem from recognizing that no actual budget has been allocated for purchasing Bitcoin recently. Initially, this reserve will mainly utilize Bitcoins already held by the U.S government primarily obtained through criminal or civil asset seizures. However, this does not rule out future accumulation of Bitcoins. The Treasury Secretary and Commerce Secretary have been authorized to explore neutral strategies within their budgets to acquire more bitcoins without increasing taxpayer burdens.

Although it isn't directly favorable as many people hoped for it still holds structural positive significance for cryptocurrencies. The risk of random sell-offs disrupting markets due to Silk Road bitcoins has been eliminated and US government's commitment towards long-term cryptocurrency strategy reaffirmed. As dust settles on announcement regarding strategic bitcoin reserves expectations around tonight’s White House crypto-currency summit have cooled down with focus shifting towards non-farm payroll data tonight.