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Donald Trump has announced that the United States will establish a ‘Crypto Strategic Reserve’, which will include Bitcoin (BTC), Ethereum (ETH), and other major cryptocurrencies as part of a national stockpile. This initiative, unveiled on Sunday, immediately led to a surge in Bitcoin’s price and other assets.
Trump’s Long-Awaited Crypto Reserve Becomes a Reality
This announcement did not come out of nowhere. Donald Trump has been toying with the idea of creating a national crypto reserve for some time. He has been an outspoken supporter of cryptocurrencies, and in recent months, it seemed only a matter of time before this idea turned into reality.
The inclusion of not just Bitcoin and Ethereum but also other altcoins may come as a surprise to some. However, this move signals a major shift in the U.S. government’s stance on digital assets.
What Does the ‘Crypto Strategic Reserve’ Include?
The exact structure of the Crypto Strategic Reserve remains unclear for now. However, it has been confirmed that Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Solana (SOL), and Cardano (ADA) will be part of the reserve.
Trump’s Executive Order from January had already hinted that the government could create a national crypto stockpile, partially composed of seized assets. Currently, the U.S. government already holds an estimated $19 billion in Bitcoin.
Previously, government agencies would regularly sell off confiscated crypto assets, causing price fluctuations. If the U.S. chooses to retain these assets instead of selling them, it could bring stability to the market and prevent future price declines.
Additionally, it appears that the U.S. government may now actively purchase cryptocurrencies, provided Congress approves the plan. This move is unprecedented and could have massive implications for the crypto industry and financial markets.
Immediate Market Reaction
The market responded positively and immediately. Bitcoin, the largest cryptocurrency by market capitalization, surged by 6.9% in the last 24 hours, reaching approximately $91,770. Ethereum, the second-largest cryptocurrency, increased by 6.8% to $2,363. Meanwhile, XRP skyrocketed by 17.5%, Solana (SOL) gained 12.8%, and Cardano (ADA) saw an explosive 47.9% increase, likely because the market did not anticipate its inclusion in Trump’s reserve.
Criticism and Risks
Despite the enthusiastic reaction from the crypto industry, some economists warn of potential risks.
Cryptocurrencies are highly volatile, and investing government funds in an unpredictable market could cost taxpayers billions if prices plummet.
The political aspect of this decision is also under scrutiny. Senator Elizabeth Warren and other Democrats have raised concerns about potential conflicts of interest within the administration. Trump’s Secretary of Commerce, Howard Lutnick, has ties to Tether (USDT), a major stablecoin issuer, raising questions about policy independence.
Additionally, Trump and his family have millions of dollars in crypto holdings, leading to speculation about personal financial benefits from the decision.
Why a National Crypto Reserve?
Supporters argue that a national crypto reserve could boost the industry and strengthen the U.S. economy. Senator Cynthia Lummis, a strong crypto advocate, previously proposed a national Bitcoin reserve as a form of “savings technology” for the government. She believes this could help reduce U.S. debt and improve financial stability.
The establishment of a ‘Crypto Strategic Reserve’ is an unprecedented initiative that could have profound effects on the crypto market. While Congress still needs to approve the plan, it appears increasingly likely that the U.S. crypto reserve is on its way.
More details will likely emerge in the coming days, shaping the future of crypto in the United States and beyond.
