**What Happened?**
U.S. President Donald Trump announced the establishment of a “U.S. Crypto Reserve” on the social media platform Truth Social. This reserve will include Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Solana (SOL), and Cardano (ADA). Many cryptocurrency investors believe that the reserve should only hold Bitcoin, while some investors argue that there should be no idea of holding digital assets in reserve at all.
**Trump Promotes “U.S. Crypto Reserve,” Bitcoin Soars**
Recently, U.S. President Donald Trump 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 announcement, the market reacted immediately, with the prices of these five cryptocurrencies skyrocketing. XRP surged by as much as 33%, SOL rose by 25%, and ADA experienced a massive increase of over 60%. Trump posted on Truth Social: “The U.S. Crypto Reserve will enhance this important industry and counter the Biden administration’s years of corrupt suppression. I will ensure that the U.S. becomes the global capital of cryptocurrency and make America great again!”
The “Crypto Strategic Reserve” is a new concept, similar to the national Strategic Petroleum Reserve, but instead of storing crude oil, it will store cryptocurrencies like Bitcoin and Ethereum. The goal is for the U.S. government to hold and manage specific cryptocurrencies to enhance national competitiveness and promote the development of the crypto industry. In fact, Trump has previously mentioned at the 2024 Bitcoin conference his desire to establish a “Strategic Bitcoin Reserve,” expressing that Bitcoin has the potential to surpass gold’s market value of $20 trillion. However, this is the first time Trump has explicitly supported the establishment of a “Reserve” rather than a “Stockpile.”
A “Reserve” indicates that the government will regularly purchase cryptocurrencies, while a “Stockpile” would merely preserve existing holdings without selling.
**Market Volatility: Bitcoin Breaks $90,000, Ethereum Strongly Recovers**
Before Trump’s post, Bitcoin prices had briefly dipped below $80,000, marking a three-month low. However, following the announcement, Bitcoin prices quickly climbed to $94,000, with a daily increase exceeding 10%. Ethereum also rebounded by 13%, shaking off its sluggish performance since the beginning of the year. This indicates that investors have high expectations for government support of cryptocurrencies, and there may be more capital flowing into the market in the future.
The market generally anticipates 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 stage of interaction between the government and the crypto industry; it is a critical moment.”
However, not everyone is excited about Trump’s decision. Some investors believe that the cryptocurrency reserve should only include 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.
**Uncertainty Remains 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, how purchases will be made, and whether congressional approval is necessary. It remains unclear whether the government will actively purchase these digital assets or only retain cryptocurrencies seized in accordance with the law.
It is notable that 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 in cryptocurrency, having launched their own meme coin and planning to enter the decentralized finance (DeFi) space. Moreover, Trump’s media company, Trump Media & Technology Group (TMTG), is also planning to introduce a Bitcoin exchange-traded fund (ETF) to compete with Wall Street giants.
If the “U.S. Crypto Reserve” is indeed successfully established, this move will propel the United States to become the “global capital of cryptocurrency.” Especially as many cryptocurrency companies are choosing to relocate their headquarters to Singapore, the UAE, or Europe due to friendlier regulatory environments. Should the Trump administration actively push for policy reforms, it could attract companies back to the U.S., reinforcing its leadership in Web3, blockchain technology, and the digital asset market.
Analysts indicate that despite Trump’s current strong support for cryptocurrencies, future political changes could still impact policy direction. For example, if a new government takes office, it may choose to sell reserves to fill budget deficits or change the overall policy direction. Therefore, the market needs to closely monitor subsequent developments.
Trump’s “U.S. Crypto Reserve” plan undoubtedly injects a strong dose of confidence into the market, driving up cryptocurrency prices. However, it remains to be seen whether government involvement in the crypto market will impact the decentralized spirit. As the White House crypto summit approaches, the market will closely watch the specifics of the Trump administration’s plans, and whether the U.S. can truly become the “capital of cryptocurrency” will depend on how concrete policies are implemented and how future international financial dynamics evolve.
Reference: Forbes, CNBC, BBC