Trump Announces Inclusion of Major Cryptocurrencies in U.S. Strategic Reserve

West Palm Beach, Florida, March 2 (Reuters) – In a significant move for the cryptocurrency market, former U.S. President Donald Trump announced on Sunday via social media that he would include five major digital assets in a new U.S. strategic reserve. The announcement led to notable increases in the value of these cryptocurrencies, which include Bitcoin, Ether, XRP, Solana, and Cardano.

Details of the Announcement

Trump’s announcement comes in the wake of an executive order he issued in January concerning digital assets. The former president revealed this strategic reserve on Truth Social, where he noted that Bitcoin (BTC) and Ether (ETH) would play central roles in this reserve. He stated, "And, obviously, BTC and ETH, as other valuable cryptocurrencies, will be at the heart of the Reserve."

The immediate reaction from the cryptocurrency market was robust, with Bitcoin rising by more than 11% to approximately $94,164 shortly after the announcement. Ether also saw a significant spike, increasing by about 13% to reach around $2,516. According to cryptocurrency data provider CoinGecko, the entire crypto market surged by about 10%, adding more than $300 billion in value.

Implications for the Crypto Industry

Trump’s support for the crypto sector aligns with his 2024 election campaign, signaling a desire to back the growing policy priorities of the cryptocurrency industry. This announcement comes just days before Trump is slated to host the first White House Crypto Summit, further demonstrating his commitment to engage with the crypto community. Notably, Trump’s family has also launched its coins, indicating a personal investment in the digital asset space.

Analysts view Trump’s announcement as a possible shift toward greater government participation in the cryptocurrency economy. Federico Brokate, head of U.S. business at 21Shares, expressed that this move could "accelerate institutional adoption, provide greater regulatory clarity, and strengthen the U.S.’s leadership in digital asset innovation."

Conversely, James Butterfill, head of research at CoinShares, expressed surprise that Trump announced not only Bitcoin but other digital assets as well. He remarked that these other assets, unlike Bitcoin, are more comparable to technology investments, suggesting a more inclusive perspective towards the broader cryptocurrency technology landscape.

Regulatory Landscape Under Trump

During Trump’s administration, the Securities and Exchange Commission has shown a more lenient stance towards the crypto industry, withdrawing investigations into several firms and dropping a lawsuit against Coinbase, the largest cryptocurrency exchange in the U.S. This marks a departure from the regulatory crackdowns experienced under Democrat Joe Biden’s administration, which sought to protect Americans from potential fraud and financial misconduct in the crypto space.

As cryptocurrency prices have faced declines in recent weeks, analysts suggest that the market is in need of catalysts such as indications from the U.S. Federal Reserve regarding interest rate cuts or concrete pro-crypto regulatory frameworks from the Trump administration.

Looking Ahead

As interest in cryptocurrencies continues to grow, attention now turns to the logistics of establishing this proposed strategic reserve. Regulatory experts are divided on whether congressional approval will be necessary to implement such an initiative. Some analysts suggest that it could potentially be set up through the U.S. Treasury’s Exchange Stabilization Fund, designed for interventions in foreign currencies.

There have also been discussions around the possibility of creating the reserve with cryptocurrencies obtained from law enforcement actions, a strategy that adds another layer to the conversation about the government’s role in the digital currency sector.

Geoff Kendrick, an analyst at Standard Chartered, has set an ambitious target, predicting that Bitcoin could reach $500,000 before the end of Trump’s term, further indicating the optimistic sentiment surrounding the potential impact of Trump’s policies on the cryptocurrency market.

Reporting by Trevor Hunnicutt in West Palm Beach, Florida; Katharine Jackson in Washington, D.C.; and Jessica DiNapoli in New York. Editing by Bill Berkrot and Lisa Shumaker.

For more timely updates and information on the cryptocurrency market, be sure to follow our coverage.

Share this article: