Despite widespread optimism following the first-ever White House Crypto Summit and the announcement of a strategic Bitcoin reserve, Bitcoin (BTC) struggled to gain upward momentum on Friday. The cryptocurrency market shed over 4% in value shortly after the event, with BTC falling below $87,000. Analysts point to rising correlations between crypto, equities, and macroeconomic data as key factors undermining bullish sentiment.
While the U.S. government's move to establish a digital asset reserve was celebrated by many in the crypto community, broader financial forces appear to be outweighing these policy-driven tailwinds. Investors are increasingly cautious amid growing economic uncertainty, shifting interest rate expectations, and volatility in traditional markets.
The Growing Link Between Crypto and Stock Markets
The latest downturn highlights a critical trend: the deepening relationship between cryptocurrency performance and traditional financial markets. Over the past several weeks, both the Nasdaq 100 and the S&P 500 have been on a downward trajectory, losing approximately 9% and 6% respectively from their February 19 peaks, according to Google Finance data.
This correlation is not new, but its strength has intensified. As macroeconomic conditions dominate investor sentiment, digital assets are behaving more like risk-on equities than independent stores of value.
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Eli Cohen, Chief Legal Officer at Centrifuge, emphasized this point in a statement to FXStreet:
"The correlation between crypto and traditional financial markets has existed for some time. Now, macro forces are so strong that any positive news for crypto is unlikely to overcome overall market sentiment."
Mike Marshall, Research Head at Amberdata, echoed this view, noting that current conditions favor safer investments.
"Bitcoin is under pressure due to harsh macro conditions—persistent inflation around 2.5%, 10-year Treasury yields fluctuating between 4.4% and 5%, and looming tariff threats. These factors drive demand toward safer assets."
Strategic Reserves: Policy Optimism vs. Market Reality
One of the most discussed outcomes of the summit was President Trump’s executive order to create a strategic Bitcoin reserve, funded exclusively by seized or forfeited crypto assets from criminal or civil cases. A parallel digital asset reserve was also announced, intended to hold other confiscated digital tokens.
While symbolically significant, experts argue that the immediate market impact will be minimal—especially since no new BTC purchases are planned.
Mike Cahill, CEO of Douro Labs, explained:
"Investors must balance optimism about pro-crypto policies against fears of a potential global recession in 2025. The 30-day correlation between Bitcoin and the S&P 500 consistently exceeds 70%, indicating a strong linkage despite potential benefits from the reserve."
He added:
"Because the reserve will use already-confiscated Bitcoin rather than buying new supply, it’s unlikely to exert any immediate buying pressure on the market."
This structural limitation means that while the policy may support long-term legitimacy for digital assets, it does little to alter short-term price dynamics.
Altcoins Tumble Despite Mention in Reserve Plans
Interestingly, altcoins linked to the proposed digital asset reserve—including Ethereum (ETH), XRP, and Cardano (ADA)—also declined sharply, dropping 3%, 7%, and 9% respectively within 24 hours.
These moves followed comments by David Sacks, AI and Crypto Czar, who suggested that Trump referenced XRP, Solana (SOL), and ADA because they were among the top five largest cryptocurrencies by market cap.
Sacks stated during a Bloomberg TV appearance:
"Well, the president just mentioned the top five market-cap cryptos, so I think people read too much into it."
However, this claim sparked backlash within the crypto community. Critics noted that Ethereum and Binance Coin (BNB) clearly rank higher than both SOL and ADA by market capitalization, raising questions about the accuracy—or intent—behind the selection.
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Still, the mere mention of specific tokens in a federal context fueled speculation about potential inclusion in the reserve. For now, though, market reactions suggest investors remain skeptical about whether such announcements translate into real demand.
Core Keywords Driving Market Sentiment
Understanding today’s crypto landscape requires recognizing several core keywords that shape investor behavior and media narratives:
- Bitcoin strategic reserve
- Macroeconomic factors
- Stock market correlation
- Crypto regulation
- Digital asset reserve
- Market volatility
- Federal crypto policy
- Risk-on assets
These terms reflect both the opportunities and challenges facing digital assets in an era of increasing regulatory scrutiny and economic uncertainty. They also align closely with user search intent around policy impacts, price movements, and investment strategy.
Frequently Asked Questions (FAQ)
Why did Bitcoin drop after the White House Crypto Summit?
Despite positive headlines about a strategic Bitcoin reserve, broader macroeconomic headwinds—including falling stock markets and rising bond yields—overshadowed the news. Investor risk appetite declined, leading to a sell-off across risk-on assets, including crypto.
Will the U.S. government buy Bitcoin for the strategic reserve?
No. According to the executive order, the reserve will be funded only with Bitcoin seized through criminal or civil forfeiture—not through new purchases. This limits direct market impact.
How are altcoins affected by the digital asset reserve plan?
While no official list has been released, speculation intensified after XRP, SOL, and ADA were mentioned. However, their prices fell post-announcement, suggesting skepticism about near-term demand creation.
What is the correlation between Bitcoin and the stock market?
Bitcoin’s 30-day correlation with the S&P 500 has consistently exceeded 70%. This means BTC often moves in tandem with equities, especially during periods of macroeconomic stress.
Could a global recession in 2025 affect crypto prices?
Yes. Fears of a recession increase demand for safe-haven assets like gold and Treasuries while reducing appetite for speculative investments like cryptocurrencies. This dynamic could suppress prices unless BTC reestablishes itself as a macro hedge.
Does mentioning a coin at the White House guarantee a price increase?
Not necessarily. While political recognition boosts visibility, actual price movement depends on trading volume, market sentiment, and underlying fundamentals—not just endorsements.
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Final Thoughts: Policy Alone Isn’t Enough
The creation of a strategic Bitcoin reserve marks a pivotal moment in U.S. crypto policy. It signals growing recognition of digital assets as legitimate financial instruments. Yet, as recent price action shows, regulatory goodwill cannot insulate crypto from macroeconomic realities.
For Bitcoin and other digital assets to sustain meaningful rallies, they must decouple—at least partially—from equities and demonstrate resilience amid inflation, rate shifts, and geopolitical uncertainty. Until then, investors should expect volatility driven more by Wall Street than Washington.
As the lines between traditional finance and decentralized technology continue to blur, staying informed—and agile—is essential. Whether you're tracking policy developments or monitoring market correlations, understanding these interconnected forces is key to navigating the evolving crypto landscape.