Bitcoin Collapses to $80,000, Wiping Out Over $200 Billion from the Crypto Market

Bitcoin just collapsed to $80,000, wiping out over $200 billion from the crypto market in one of the worst single-day crashes over the past year, according to data from CoinGecko.

Bitcoin price today slid below the $80,000 level, cancelling out over $200 billion from the crypto market in one of the worst single-day crashes we’ve seen over the past year, according to data from CoinGecko.

As Ether also crashed below $2,000 to trade at $1,992—a level we haven’t seen in over six months—the sudden sell-off came after Donald Trump signed an Executive Order on Thursday, officially launching the Strategic Bitcoin Reserve. A decision you’d expect to boost prices, not tank them.

Friday’s White House Crypto Summit was set to be the big event, but Trump threw a curveball by announcing the reserve ahead of schedule. Traders were betting on a bullish rally from this move, but instead, Bitcoin dropped from $90,000 to $85,000 within minutes of the announcement.

The market reaction was brutal. Options traders were seen unwinding long positions, volatility spiked, and put contracts saw surging demand as traders scrambled to hedge against deeper downsides, according to data from Coinglass.

Trump’s Bitcoin reserve triggers sell-off instead of rally

The Executive Order confirms the US government’s plan to stockpile Bitcoin in an effort to diversify its foreign exchange reserves. But there’s a small detail—there’s no new funding for purchases yet.

The initial Strategic Bitcoin Reserve will be funded using Bitcoin already seized from criminal or civil asset forfeiture, which means there won’t be any immediate demand pressure.

Later, Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick will be tasked with figuring out “budget-neutral” ways to add more Bitcoin without costing taxpayers a dime.

However, that wasn’t exactly what traders wanted to hear. The market was largely anticipating an announcement of large-scale crypto purchases to fund the reserve, kicking off a massive bull rally. But instead, there will be no new buying activity at least initially.

Also, traders were expecting this announcement to come on Friday, at the White House Crypto Summit. But Trump surprised everyone by signing the order early on Thursday.

This makes sense considering the administration is focused on cutting government spending and programs. Launching a new crypto fund, even if it’s funded through forfeiture assets, might not align with their current priorities.

What happened: A look at the market reaction

The market is now pricing in more downside risk than upside potential, according to trading company QCP.

“The skew has flipped again. Makes sense with the LTC and ADA and SOL coins also getting sold off today. Paynopause is getting sold off too. Back to square one,” the company wrote in its Friday Telegram note.

Its analysis shows that traders were massively bullish on cryptocurrencies like Litecoin, Cardano, and Solana earlier this week, but that quickly reversed.

Its analysis shows that traders were massively bullish on cryptocurrencies like Litecoin, Cardano, and Solana earlier this week, but that quicklyलीजिए.