Bitcoin’s Dramatic Plunge: A Comedy of Errors in the Crypto World! 😂

On the fateful day of March 7, 2025, the illustrious Scott Melker, a crypto savant and the host of the Wolf of All Streets podcast, found himself in a veritable tempest of thoughts. He devoted a significant portion of his Wolf Den newsletter to dissecting the implications of the Bitcoin reserve launch, a momentous event that had the public buzzing like a hive of agitated bees. Later that very day, he took to his X account, expounding upon the profound significance of this historic occurrence, as if he were a prophet heralding the dawn of a new era.

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The U.S. Strategic Bitcoin Reserve creation

Ah, the grand promise of Donald Trump! During a summer speech in 2024 at the Nashville Bitcoin conference, he proclaimed the impending launch of a Bitcoin stockpile, a vision that danced in the minds of many like a mirage in the desert. Around the same time, the ever-ambitious Sen. Cynthia Lummis introduced a bill suggesting that the U.S. should acquire a million bitcoins over five long years. Expectations soared, as if the very heavens had opened up to shower blessings upon the crypto faithful.

Yet, reality, that cruel mistress, had other plans. Trump, in his inauguration speech, failed to utter a single word about crypto, leaving the faithful in a state of disillusionment. However, he did grant a pardon to Ross Ulbricht of Silk Road fame, a move that, while perhaps noble, did little to satiate the crypto hunger. The Bitcoin reserve plans were eventually confirmed, and Sen. Lummis ascended to the chair of the Senate Banking Subcommittee on Digital Assets, a position that surely made her feel like a queen in a digital kingdom.

On March 6, the executive order to establish a Bitcoin reserve was signed, but lo and behold! It was not the reserve Lummis had envisioned. Instead, it bore the unmistakable stamp of Trump’s original vision—a stockpile of seized bitcoins, never to be sold, a veritable treasure trove amassed through the spoils of seizures and forfeitures, all without touching the taxpayers’ wallets. A masterstroke, or so they claimed!

As it stands, the U.S. holds approximately 200,000 bitcoins, though the exact figure remains shrouded in mystery, prompting an audit that could rival a detective novel. The Digital Assets Stockpile was birthed on the same day, destined to include other cryptocurrencies like ETH, ADA, SOL, and XRP. Yet, whispers of conflict of interest swirled around White House crypto czar David Sacks, who may, or may not, profit from this grand endeavor. Sacks, of course, vehemently denied such accusations, as if he were a character in a Dostoevskian drama, defending his honor.

But alas! Following the creation of the Bitcoin Reserve, the price of BTC plummeted by a staggering $5,000, a drop that left many scratching their heads in disbelief. The Strategic Bitcoin Reserve, once heralded as the beacon of hope for bulls, had seemingly turned into a harbinger of doom. Scott Melker, ever the optimist, sought to explain this curious phenomenon, asserting that the price drop was merely a reflection of the disappointment felt by those who had anticipated a buying frenzy.

The price drop explained

Melker, with the fervor of a man on a mission, linked the price drop to the disillusionment of those who had pinned their hopes on the Strategic Bitcoin Reserve leading to a massive influx of Bitcoin purchases. He declared, with a flourish, that the reaction to the reserve made one thing abundantly clear: most self-proclaimed Bitcoin enthusiasts were, in fact, merely fixated on the numbers going up, like children chasing after a balloon that always seems just out of reach.

In his newsletter, Melker triumphantly proclaimed, “We did it!”—a phrase that echoed through the digital corridors like a battle cry. He hailed the recognition of Bitcoin as a strategic asset as America’s most significant move in the grand game of Bitcoin. He warned that other nations would soon be compelled to follow suit, for the U.S. could hardly bear the thought of playing second fiddle to China in the Bitcoin reserve race. As it stood, the U.S. reserve might be dwarfed by its Chinese counterpart, setting the stage for a global Bitcoin showdown that would inevitably drive prices upward in the long run.

Moreover, Melker elucidated the distinction between the Digital Assets Stockpile and the Strategic Bitcoin Reserve, suggesting that the U.S. had explicitly deemed Bitcoin the sole cryptocurrency worthy of such strategic consideration. A bold assertion, indeed!

“While some critics argue this doesn’t immediately impact the market because the government isn’t actively buying Bitcoin yet, they’re missing the long-term significance. The U.S. just signaled that Bitcoin is here to stay as a key financial asset, and history tells us that when America sets the standard, the rest of the world follows.”

As for the price drop, Melker introduced yet another factor, suggesting that when monumental news drops into an illiquid market, it flushes out the weak hands, leaving only the stalwart investors to emerge from the fray. And indeed, that is precisely what transpired. The Wolf of All Streets host continued, asserting that the global demand for Bitcoin, ignited by the SBR launch, would ultimately increase upward pressure in the long term, like a relentless tide.

Other reactions

Yet, amidst the cacophony of voices on the Internet, angry murmurs arose following the revelation of the BTC reserve details. Many were disillusioned by the decision not to utilize tax money for further Bitcoin acquisitions. Some even drew parallels between U.S. Marshalls holding seized bitcoins and the U.S. Treasury holding the same coins in the SBR, as if they were mere pawns in a grand game of chess.

Scott Melker, ever the defender of the faith, confronted this viewpoint, arguing that it overlooked the nuances of the executive order, which did not preclude future budget-neutral BTC acquisitions. A battle of wits ensued, reminiscent of the great philosophical debates of yore.

Jeff Park of Bitwise Invest dismissed the executive order with a wave of his hand, declaring there was nothing strategic about it. He lamented that the entire SBR saga had devolved into a major pump-and-dump chapter, and he was relieved it was finally over. A sentiment that echoed through the digital ether.

Yet, amidst the turmoil, many Bitcoin bulls emerged, praising the executive order as a historical milestone. Senator Lummis, despite her project being cast aside, voiced her unwavering support for the move, her only concern being the lack of congressional backing for the Strategic Bitcoin Reserve.

A prominent Bitcoin supporter, known only as the Bitcoin Therapist, hailed the order as “the most bullish news [he has] seen in the past four years.” A proclamation that reverberated through the digital landscape.

And so, dear reader, the U.S. has crossed the Rubicon. What lies ahead in this grand saga remains to be seen, but one thing is certain: the world of Bitcoin is as unpredictable as the human heart itself.

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2025-03-08 01:41