Cryptocurrency values surged following President Donald Trump’s unexpected revelation that he plans for the U.S. government to purchase and maintain a variety of digital currencies in a strategic reserve. This move underscores Trump’s increasing efforts to leverage the volatile nature of cryptocurrency values as a gauge of his public support.
On Sunday, Trump disclosed via social media that his administration is striving to establish a “Crypto Strategic Reserve” that will encompass lesser-known cryptocurrencies such as XRP, solana, and cardano. He subsequently confirmed his intent to include bitcoin and ether, the two most prominent cryptocurrencies, in the planned reserve.
Following this announcement, there was a temporary rally in cryptocurrency prices, which had been declining. By Monday morning, the price of bitcoin had surpassed $90,000 after previously falling below $80,000. Meanwhile, XRP, solana, and cardano experienced significant price surges in response to Trump’s declaration on Sunday, although there was a more moderated drop on Monday morning.
Throughout his campaign, Trump promised to back a “strategic national bitcoin” reserve, proposing the inclusion of bitcoin confiscated by the U.S. government in law enforcement activities. However, Sunday’s announcement marked his first explicit endorsement for the U.S. government to possess various types of cryptocurrencies.
The White House has yet to provide further specifics, such as the quantity of each type of cryptocurrency that Trump intends for the U.S. to hold, the method of acquisition, or whether he supports the inclusion of additional types of digital currencies.
Eric Trump, the president’s son, expressed that the increase in prices validated his recent social media advice to invest in crypto assets, asserting, “Hopefully, I made someone’s life just a little bit better,” in an online post.
Positioning himself as a champion of the crypto industry, Trump declared in his announcement that the sector had endured “years of corrupt attacks by the Biden administration.” Feeling unjustly targeted by the previous administration, the crypto industry had invested heavily in bolstering Trump’s campaign. Early actions from his presidency included halting or discontinuing major enforcement initiatives by the Securities and Exchange Commission, aimed at invigorating the crypto sector.
Crypto values skyrocketed following Trump’s electoral win last year, and when bitcoin exceeded the $100,000 mark in early December, Trump took to social media to claim, “YOU’RE WELCOME!!!” However, since Trump’s inauguration, values have dipped, and criticism has ensued, even from supporters within the crypto world, particularly over the failed launch of a personal meme coin shortly before assuming office. Additionally, the collapse of meme coins associated with figures like First Lady Melania Trump and Argentine President Javier Milei, along with a massive hack on a major exchange attributed by the FBI to North Korea, further dampened enthusiasm for the sector.
Dave Portnoy, a well-known figure in the crypto community, questioned the disparity between Trump’s perceived influence and the current state of crypto, remarking, “Why is crypto in the toilet if Trump is crypto king?”
The push to include cryptocurrencies beyond bitcoin may encounter significant opposition in certain segments of the notably fragmented crypto industry. Bitcoin, being the oldest and most widely favored cryptocurrency, represents a substantial portion of the global crypto market capitalization.
Proponents of governmental cryptocurrency reserves argue it would broaden government holdings and serve as a financial safeguard. Conversely, detractors point to the inherent volatility of digital currencies, deeming them unsuitable as reserve assets.
Aside from Sunday’s announcement, Trump has also recently proclaimed that he will convene and engage with industry leaders this Friday at a White House-hosted “Crypto Summit.”
