The cryptocurrency market witnessed a dramatic surge over the weekend after President Donald Trump confirmed plans to establish a U.S. strategic crypto reserve that would include several major digital assets. The announcement, made via a series of posts on Truth Social, triggered significant price movements across the crypto market, with some coins seeing gains of over 60%.
The Announcement That Rocked the Market
In his initial post on Sunday, Trump outlined his administration’s plans to create a national stockpile of cryptocurrencies, specifically naming XRP, Solana, and Cardano as assets to be included. The notable absence of Bitcoin and Ethereum in this first message sparked immediate speculation in the crypto community, causing temporary uncertainty in the market.
However, Trump quickly clarified the situation in a follow-up post just over an hour later: “And, obviously, BTC and ETH, as other valuable Cryptocurrencies, will be at the heart of the Reserve. I also love Bitcoin and Ethereum!”
This confirmation sent Bitcoin soaring nearly 11% to $95,000, recovering substantially from Friday’s low of $78,940. Ethereum similarly jumped 14% to over $2,500, though it still remains down 11% for the week following recent market turbulence.
Altcoins See Even Bigger Gains
While Bitcoin and Ethereum posted impressive gains, the altcoins specifically mentioned in Trump’s original post experienced even more dramatic price movements:
- XRP: Surged 35% to reach $2.92
- Solana: Rose 24% to $175
- Cardano: Led the pack with a staggering 68% jump to $1.07
These substantial gains reflect the market’s enthusiasm for these specific assets potentially becoming part of a government-backed reserve.
The Reasoning Behind the Reserve
In his announcement, Trump framed the creation of a crypto reserve as a necessary response to what he characterized as “years of corrupt attacks by the Biden administration” on the cryptocurrency industry. He referenced a January executive order on digital assets that directs officials to move forward with establishing a “crypto strategic reserve.”
“A U.S. crypto reserve will elevate this critical industry,” Trump stated, reinforcing his administration’s commitment to positioning the United States as a leader in the digital asset space.
Trump’s Evolving Stance on Cryptocurrency
Sunday’s announcement aligns with Trump’s increasingly pro-crypto rhetoric in recent months. In December, he told CNBC that the U.S. was working on a Bitcoin strategic reserve, stating, “We’re gonna do something great with crypto because we don’t want China, or anybody else … but others are embracing it, and we want to be ahead.” When asked if the planned reserve would be similar to the nation’s strategic petroleum reserve, he responded affirmatively.
During his appearance at the Bitcoin 2024 conference last July, Trump had already signaled his intentions to create a “strategic national Bitcoin reserve” and made the bold prediction that Bitcoin could eventually surpass gold’s $20 trillion market capitalization.
This pro-crypto stance represents a significant evolution in Trump’s position on digital assets. During his first term, he had expressed skepticism about cryptocurrencies, famously tweeting in July 2019 that he was “not a fan of Bitcoin and other Cryptocurrencies.” His campaign pledge to roll back Biden-era crypto regulations has fueled optimism throughout the industry.
Market Impact and Industry Response
The total cryptocurrency market capitalization rose by approximately $300 billion in the hours following Trump’s announcement, according to data from CoinGecko. This significant influx of capital demonstrates the weight that government policy carries in the volatile crypto markets.
Industry experts have responded positively to the announcement. Federico Brokate, head of U.S. business at 21Shares, a digital assets investment management firm, called it “a pivotal moment” for the industry, adding: “It has the potential to accelerate institutional adoption, provide greater regulatory clarity, and strengthen the U.S.’s leadership in digital asset innovation.”
James Butterfill, head of research at asset manager CoinShares, expressed surprise at the inclusion of assets beyond Bitcoin in the reserve. “Unlike bitcoin…these assets are more akin to tech investments,” Butterfill noted. “The announcement suggests a more patriotic stance toward the broader crypto technology space, with little regard for the fundamental qualities of these assets.”
The Trump Family’s Growing Crypto Involvement
The Trump family has been increasingly active in the cryptocurrency space. In January, the president and former First Lady Melania Trump launched two meme coins, which initially saw significant price appreciation before ultimately losing over 80% of their value.
His sons, Don Jr. and Eric, have been leading World Liberty Financial, a cryptocurrency platform focused on stablecoin-based earnings and lending. Meanwhile, Trump Media and Technology Group (TMTG), which operates Truth Social, has been taking steps toward launching a Bitcoin ETF, potentially competing with established financial institutions like BlackRock and Fidelity.
Implementation Questions Remain
While the market has responded enthusiastically to Trump’s announcement, significant questions remain about how the crypto reserve will be implemented. Analysts and legal experts are divided on whether an act of Congress will be necessary to establish the reserve.
Some experts suggest the reserve could be created through the U.S. Treasury’s Exchange Stabilization Fund, which has the authority to purchase or sell foreign currencies. Others point to the possibility of building the stockpile using cryptocurrencies seized in law enforcement actions, an approach that Trump’s crypto advisory group had reportedly been considering.
Looking Forward: What This Means for Crypto
The creation of a U.S. crypto reserve represents a potential paradigm shift in how governments interact with digital assets. If implemented, it would represent the first major national investment in cryptocurrencies by a world power and could signal a new era of institutional adoption.
Geoff Kendrick, an analyst at Standard Chartered, has set an ambitious target for Bitcoin to reach $500,000 before the end of Trump’s term, far surpassing its current record high of $109,071.
Recent regulatory filings have shown that while hedge funds remain the dominant buyers of crypto assets, banks and sovereign wealth funds are increasingly entering the market. Asset managers also boosted their allocations to U.S. ETFs tied to spot Bitcoin prices in the fourth quarter of 2024.
The crypto market had experienced a significant pullback in recent weeks, erasing many of the gains made following Trump’s election victory in November. Analysts have suggested that the market needed a catalyst to move higher, such as signals that the Federal Reserve plans to cut interest rates or clear pro-crypto regulatory frameworks from the administration.
Trump’s announcement may have provided exactly the stimulus the market was looking for, potentially setting the stage for a new bull run in the cryptocurrency space. The upcoming White House Crypto Summit scheduled for Friday will likely provide further insights into the administration’s plans for the digital asset industry.
As the details of the crypto reserve continue to unfold, investors and industry participants will be watching closely for signals about which assets might be included and in what proportions, as well as the regulatory frameworks that will govern this unprecedented government initiative in the cryptocurrency space. Check cryptonewstoday for latest updates
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