What Happened?
U.S. President Donald Trump announced the establishment of a “U.S. Crypto Reserve” on the social media platform Truth Social, which will include Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Solana (SOL), and Cardano (ADA). Many cryptocurrency investors believe that a crypto reserve should only hold Bitcoin, while some investors argue that the idea of holding digital assets as reserves should be completely abandoned.
Trump Promotes “U.S. Crypto Reserve,” Bitcoin Soars
President Donald Trump recently announced that the United States will establish a “Crypto Strategic Reserve,” naming five cryptocurrencies to be included in the reserve: Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Solana (SOL), and Cardano (ADA).
Upon the release of this news, the market reacted immediately, with prices of these five cryptocurrencies soaring, with XRP increasing by as much as 33%, SOL rising by 25%, and ADA experiencing a surge of over 60%. Trump posted on Truth Social, stating, “The U.S. Crypto Reserve will elevate this important industry and resist years of corruption and suppression by the Biden administration. I will ensure that the United States becomes the global hub for cryptocurrency and make America great again!”
The “Crypto Strategic Reserve” is a new concept, similar to the Strategic Petroleum Reserve, but instead of storing crude oil, it will store cryptocurrencies like Bitcoin and Ethereum. The aim is for the U.S. government to hold and manage specific cryptocurrencies to enhance national competitiveness and promote the development of the cryptocurrency industry. In fact, Trump had previously mentioned at the 2024 Bitcoin Conference his hope to establish a “Strategic Bitcoin Reserve” and stated that Bitcoin has the potential to surpass gold’s market value of $20 trillion. However, this marks the first time Trump has explicitly supported the establishment of a “Reserve” rather than a “Stockpile.”
“Reserve” indicates that the government will regularly purchase cryptocurrencies, while “Stockpile” refers to retaining existing holdings without selling them.
Market Volatility: Bitcoin Breaks $90,000, Ethereum Recovers Strongly
Before Trump’s post, the price of Bitcoin dipped below $80,000, marking a three-month low. However, following Trump’s announcement, the price of Bitcoin swiftly climbed to $94,000, gaining over 10% in a single day, while Ethereum also rose by 13%, breaking free from its sluggish performance since the beginning of the year. This indicates that investors have high expectations for government support of cryptocurrency, and more capital may flow into the market in the future.
The market generally believes that Trump’s policies will bring significant changes to the cryptocurrency industry. Federico Brokate, head of U.S. operations at investment firm 21Shares, stated, “The establishment of a cryptocurrency reserve by the U.S. government represents a new phase of interaction between the government and the crypto industry; this is a pivotal moment.” However, not everyone is excited about Trump’s decision. Some investors believe that the crypto reserve should only contain Bitcoin, as it is the most decentralized digital asset. Others worry that government intervention could lead to market manipulation or even turn cryptocurrencies into policy tools.
Uncertainties in Cryptocurrency Policy: Trump to Hold White House Crypto Summit
Trump plans to hold a “Cryptocurrency Summit” at the White House this Friday (March 7), where he will further elaborate on the details of the “U.S. Crypto Reserve,” including how it will operate, the purchasing methods, and whether congressional approval will be necessary. It remains unclear whether the government will actively purchase these digital assets or only retain cryptocurrencies that have been seized legally.
Notably, Trump has previously criticized Bitcoin, even calling it a “scam” during a media interview in 2021. However, recently, Trump and his family have been actively engaging with cryptocurrency, launching their own meme coin and planning to enter decentralized finance (DeFi). Additionally, Trump’s media company, Trump Media & Technology Group (TMTG), plans to launch a Bitcoin exchange-traded fund (ETF) to compete with Wall Street giants.
If the “U.S. Crypto Reserve” is successfully established, it would propel the United States to become the “global cryptocurrency capital.” This is particularly significant as many cryptocurrency companies are choosing to relocate their headquarters to Singapore, the UAE, or Europe due to more favorable regulatory environments. If the Trump administration actively promotes policy reforms, it could attract businesses back to the U.S., strengthening its leadership position in Web3, blockchain technology, and the digital asset market.
Analysts point out that although Trump currently supports cryptocurrency wholeheartedly, future political changes could still affect the direction of policy implementation. For instance, if a new government takes office, it may choose to sell reserves to fill budget deficits or alter the overall policy direction. Therefore, the market needs to closely monitor subsequent developments.
Trump’s plan for the “U.S. Crypto Reserve” undoubtedly injects confidence into the market, driving up cryptocurrency prices. However, whether government intervention in the crypto market will impact the spirit of decentralization remains to be seen. With the White House Crypto Summit approaching, the market will closely watch the Trump administration’s specific plans; whether the U.S. can truly become the “cryptocurrency capital” will depend on how concrete policies are implemented and how the future international financial landscape evolves.
Sources: Forbes, CNBC, BBC