Bitcoin Plunges Below $89,000 as Several US States Reject Bitcoin Strategic Reserve

Bitcoin (BTC) fell below $89,000 on Tuesday. According to CoinDesk, the market’s largest cryptocurrency hit a low of $88,500, a level last seen in mid-November. CoinDesk believes the decline is due to some states refusing to approve bills to create a strategic reserve in bitcoin.

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«Despite US President Donald Trump’s pro-Bitcoin stance, state-level proposals to create Bitcoin reserves have failed in Montana, North Dakota and Wyoming. “The reluctance to approve a government reserve in Bitcoin highlights the political risks, as politicians do not want to be accused of speculating with taxpayers’ money,” said Valentin Fournier, an analyst at BRN. He suggested that a more realistic path to adopting the concept of using cryptocurrency as a federal reserve would be to announce a national reserve strategy, potentially backed by a bond issue or a partial sale of US gold reserves.

Some observers believe that BTC’s decline is consistent with the contraction of the global money supply at the beginning of the year. “There seems to be a lag in the change in the global money supply and BTC,” Andre Dragosch, head of research at Europe-Biwise, wrote on social media X, commenting on the BTC price drop. He noted that the money supply has recently bottomed out, meaning that the decline in BTC’s value may not last long.

For now, experts’ attention appears to be focused on traditional markets, which are creating an atmosphere of risk aversion, CoinDesk writes. Nasdaq futures fell 0.3% this morning, extending their third straight day of declines and a more than 4% drop since Feb. 18.