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Bitcoin reserve backlash signals unrealistic industry expectations
The widespread disappointment surrounding the US Strategic Bitcoin Reserve — hailed as a historic step for Bitcoin adoption — suggests unrealistic investor expectations, according to regulatory experts.
President Donald Trump signed an executive order on March 7, which will utilize Bitcoin (BTC) seized in government criminal cases rather than purchasing the asset directly from the market. The announcement triggered a more than 6% drop in Bitcoin’s price, falling from $90,400 to $84,979, according to Cointelegraph Markets Pro data.
The reaction signals unrealistic industry expectations, according to Anastasija Plotnikova, co-founder and CEO of Fideum, a regulatory and blockchain infrastructure firm focused on institutions.
BTC/USD, 1-month chart. Source: Cointelegraph
“It was very clear that the US government could utilize the existing BTC in their possession, aka seized funds,” she told Cointelegraph, adding:
“It is bizarre to see such a big public disappointment coming from some industry players. […] Not that long ago, even the idea of BTC Reserve held and supported by a federal government was a revolutionary idea, and now we see a very solid implementation.”
The Bitcoin reserve is a “cautious” approach with taxpayer funds, which “make this decision well aligned with the messaging from this administration,” added the regulatory expert.
Source: Margo Martin
Although the current plan does not involve government Bitcoin purchases, the order does not rule them out in the future. The order authorizes the US Treasury and Commerce secretaries to develop “budget-neutral strategies” to buy more Bitcoin for the reserve, provided there are no additional costs to taxpayers.
Still, the short-term investor disappointment paired with ongoing macroeconomic concerns related to import tariffs may push Bitcoin to a weekly close below $82,000, risking more downside volatility, analysts told Cointelegraph.
Related: US Bitcoin reserve marks ‘real step’ toward global financial integration
White House Crypto Summit “dramatic shift” from Biden administration
Trump signed the historic Bitcoin reserve order a day ahead of hosting the first White House Crypto Summit, which also received mixed reactions from the crypto community.
Despite its divided reception, the summit marks a pivotal moment for the White House’s engagement with the crypto industry, according to Alexander Urbelis, general counsel and chief information security officer at Ethereum Name Service.
Urbelis told Cointelegraph:
“The very fact that the summit is happening is a dramatic shift from the hands-off approach of the Biden Administration and is sure to resound with the blockchain community as well as younger voters. “
Related: Trump turned crypto from ‘oppressed industry’ to ‘centerpiece’ of US strategy
“There are high hopes for the outcome of the Crypto Summit. One of those hopes is that engagement like this with the White House will continue long after the initial meeting,” he added.
Magazine: SCB tips $500K BTC, SEC delays Ether ETF options, and more: Hodler’s Digest, Feb. 23 – Mar. 1
Crypto exchange Bitnomial has voluntarily dismissed its lawsuit against the US Securities and Exchange Commission ahead of launching its Ripple XRP futures in the United States. The Chicago-based firm said in a March 19 statement to X that its XRP (XRP) futures are regulated by the US Commodity Futures Trading Commission and will be available from March 20 for current users. “Bitnomial is launching the first-ever CFTC-regulated XRP futures in the US — physically settled for real market impact,” Bitnomial said. “Plus, we’ve voluntarily dismissed our case against the SEC as regulatory clarity improves,” it added. Source: Bitnomial The exchange filed a self-certification with the CFTC to list XRP futures contracts on its exchange in August 2024. However, the SEC blocked the move, pushing for Bitnomial to register as a securities exchange before it could list the futures. Bitnomial sued the SEC and its five commissioners on Oct. 10, accusing the agency of overextending its jurisdiction by claiming that XRP is a security. Bitnomial’s XRP futures launch follows Ripple CEO Brad Garlinghouse’s March 19 announcement the SEC opted out of continuing an appeal against a ruling labeling XRP as not a security for retail sales. A July 13, 2023 judgment from Judge Analisa Torres deemed XRP is not a security for retail sales; however, she opined it was when sold to institutional investors, as it met the conditions set in the Howey test. The SEC was appealing Torres’s decision. The SEC initially launched legal action against Ripple Labs in December 2020, accusing the firm of illegally selling its token as an unregistered security. Related: Vermont follows SEC’s lead, drops staking legal action against Coinbase Under the Trump administration, the SEC has slowly been walking back its hardline stance toward crypto forged under former SEC Chair Gary Gensler’s reign, dismissing a growing number of enforcement actions against crypto firms. The agency’s acting chair, Mark Uyeda, who took the reins after Gensler resigned on Jan. 20, flagged plans on March 17 to scrap a rule proposed under the Biden administration that would tighten crypto custody standards for investment advisers. Uyeda also said in a March 10 speech that he had asked SEC staff for options to abandon part of proposed changes that would expand regulation of alternative trading systems to include crypto firms, requiring them to register as exchanges. Magazine: SEC’s U-turn on crypto leaves key questions unanswered United States President Donald Trump will reportedly speak at Blockworks’ Digital Asset Summit in New York on March 20, Blockworks said. His speech will mark the first time a sitting US president has ever spoken at a cryptocurrency conference, Blockworks said in a March 19 announcement. Trump’s presence at the event underscores his embrace of an industry that, under former US president Joe Biden, was the target of more than 100 enforcement actions by federal regulators. “When we started Blockworks we could barely get someone from a bank to attend an event,” Jason Yanowitz, one of Blockworks co-founders, said in a March 19 post on the X platform. “Now we have a sitting US President addressing […] 2,500 institutional participants. It is incredible how far this industry has come,” Yanowitz said. Blockworks reportedly confirmed Trump will address attendees via a video recording at 10:40 am, Fox Business reporter Eleanor Terrett said in an X post. Source: Jason Yanowitz Related: SEC will drop its appeal against Ripple, CEO Garlinghouse says During his 2024 presidential campaign, Trump spoke at the Bitcoin 2024 conference in Nashville, Tennessee, where he promised to make America the “world’s crypto capital” and hinted at plans to form a national Bitcoin (BTC) reserve. Since starting his presidential term on Jan. 20, Trump has signed executive orders instructing regulatory bodies to accommodate digital assets, forming a White House crypto advisory team, and creating a US Strategic Bitcoin Reserve and Digital Asset Stockpile. He has also nominated pro-industry leadership to key regulatory posts, including at the US Securities and Exchange Commission (SEC) and Treasury Department. Bo Hines, executive director of the President’s Council of Advisers on Digital Assets, spoke at the Digital Asset Summit earlier this week. On March 19, Brad Garlinghouse, CEO of Ripple Labs, announced the SEC was dropping its years-long enforcement action against the blockchain developer while at the Summit. Since Trump took office, the agency has also dropped charges against other crypto firms — including Coinbase, Kraken and Uniswap — for allegedly violating securities laws. Blockworks did not specify the topics Trump planned to cover during his speech, which it said would take place Thursday morning. Representatives of the White House and Hines did not immediately reply to Cointelegraph’s request for comment. Crypto industry executives told Cointelegraph in March they are hoping Trump will provide more detailed regulatory clarity on topics such as stablecoin regulation and taxes. Magazine: Unstablecoins: Depegging, bank runs and other risks loom Victims of address poisoning scams were tricked into willingly sending over $1.2 million worth of funds to scammers, showcasing the problematic rise of cryptocurrency phishing attacks. Address poisoning, or wallet poisoning scams, involves tricking victims into sending their digital assets to fraudulent addresses belonging to scammers. Pig butchering schemes on Ethereum have cost the crypto industry over $1.2 million worth of funds in the nearly three weeks since the beginning of the month, wrote onchain security firm Cyvers in a March 19 X post: “Attackers send small transactions to victims, mimicking their frequently used wallet addresses. When users copy-paste an address from their transaction history, they might accidentally send funds to the scammer instead.” Source: Cyvers Alerts Address poisoning scams have been growing, since the beginning of the year, costing the industry over $1.8 million in February, according to Deddy Lavid, co-founder and CEO of Cyvers. The growing sophistication of attackers and the lack of pre-transaction security measures are some of the main reasons for the increase, the CEO told Cointelegraph, adding: “More users and institutions are leveraging automated tools for crypto transactions, some of which may not have built-in verification mechanisms to detect poisoned addresses.” While the higher transaction volume due to the crypto bull market is a contributing factor, pre-transaction verification methods may stop a significant amount of phishing attacks, said Lavid, adding: “Unlike traditional fraud detection, many wallets and platforms lack real-time pre-transaction screening that could flag suspicious addresses before funds are sent.” Related: August sees 215% rise in crypto phishing, $55M lost in single attack Address poisoning scams have previously cost investors tens of millions. In May 2024, an investor sent $71 million worth of Wrapped Bitcoin to a bait wallet address, falling victim to a wallet poisoning scam. The scammer created a wallet address with similar alphanumeric characters and made a small transaction to the victim’s account. However, the attacker returned the $71 million days later, after he had an unexpected change of heart due to the growing attention from blockchain investigators. Related: Ledger users targeted by malicious ‘clear signing’ phishing email Phishing scams are becoming a growing threat to the crypto industry, next to traditional hacks. Pig butchering scams are another type of phishing scheme involving prolonged and complex manipulation tactics to trick investors into willingly sending their assets to fraudulent crypto addresses. Pig butchering schemes on the Ethereum network cost the industry over $5.5 billion across 200,000 identified cases in 2024, according to Cyvers. The average grooming period for victims lasts between one and two weeks in 35% of cases, while 10% of scams involve grooming periods of up to three months, according to Cyvers data. Pig butchering victim statistics and grooming periods. Source: Cyvers In an alarming sign, 75% of victims lost over half of their net worth to pig butchering scams. Males aged 30 to 49 are most affected by these attacks. Phishing scams were the top crypto security threat of 2024, which netted attackers over $1 billion across 296 incidents as the most costly attack vector for the crypto industry. Magazine: Down to $200 one day, Pixels founder had $2.4M the next: Luke Barwikowski, X Hall of Flame Arthur Hayes, Murad’s Prediction For Meme Coins, AI & DeFi Coins For 2025 Expert Sees Bitcoin Dipping To $50K While Bullish Signs Persist Aptos Leverages Chainlink To Enhance Scalability and Data Access Bitcoin Could Rally to $80,000 on the Eve of US Elections Sonic Now ‘Golden Standard’ of Layer-2s After Scaling Transactions to 16,000+ per Second, Says Andre Cronje Institutional Investors Go All In on Crypto as 57% Plan to Boost Allocations as Bull Run Heats Up, Sygnum Survey Reveals Crypto’s Big Trump Gamble Is Risky Ripple-SEC Case Ends, But These 3 Rivals Could Jump 500x
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Phishing scams are a growing problem for the crypto industry
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