Trump Announces Cryptocurrency Reserve, Boosting Market
WEST PALM BEACH, Florida – Former U.S. President Donald Trump announced on social media that five digital assets would be included in a new U.S. strategic reserve of cryptocurrencies, causing a significant jump in the market value of each.
Trump revealed in a post on Truth Social that his January executive order on digital assets would establish a cryptocurrency stockpile. The assets named were Bitcoin, Ether, XRP, Solana, and Cardano. These specific cryptocurrencies had not been previously mentioned.
More than an hour after the initial post, Trump added, “And, obviously, BTC and ETH, as other valuable Cryptocurrencies, will be at the heart of the Reserve.”
Following the announcement, Bitcoin experienced a surge, rising over 11% to reach $94,164 on Sunday afternoon. Ether, the second-largest cryptocurrency, increased by approximately 13%, reaching $2,516. According to CoinGecko, a cryptocurrency data and analysis company, the overall cryptocurrency market has risen by about 10%, equating to over $300 billion, in the hours since Trump’s revelation.
XRP is a token of Ripple Labs, a cryptocurrency firm. It was previously reported by Reuters that Ripple supported a super PAC to influence congressional elections in November, favoring the crypto industry.
In reaction to the news, Federico Brokate, the head of U.S. business at 21Shares, a digital assets investment management firm, stated, “This move signals a shift toward active participation in the crypto economy by the U.S. government. 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, the head of research at the 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.”
During his 2024 election campaign, Trump received support from the crypto industry, and he has since moved quickly to support their policy priorities. He is scheduled to host the first White House Crypto Summit on Friday. In addition, his family has launched their own coins.
During the previous administration under Joe Biden, regulators increased scrutiny of the industry in an effort to protect Americans from fraud and money laundering. Under the Trump administration, the Securities and Exchange Commission has withdrawn investigations into several crypto companies and dropped a lawsuit against Coinbase.
However, cryptocurrency prices have recently declined sharply, with some of the largest digital currencies erasing nearly all of the gains made after Trump’s election victory. Analysts suggest that the market needs a boost, such as signals that the U.S. Federal Reserve intends to lower interest rates or a clear pro-crypto regulatory framework from the Trump administration.
Reuters has reported that Geoff Kendrick, an analyst at Standard Chartered, has a target for Bitcoin to hit $500,000 before Trump leaves office. This would represent a significant increase from its previous record high of $109,071.
Regulatory filings in the U.S. show that while hedge funds are still the dominant crypto buyers, banks and sovereign wealth funds are increasingly participating. Quarterly filings indicated that asset managers increased allocations to U.S. ETFs tied to the price of spot Bitcoin in the fourth quarter of 2024.
There is ongoing debate amongst analysts and legal experts regarding whether an act of Congress will be required to establish the reserve. Some have argued that it could be created through the U.S. Treasury’s Exchange Stabilization Fund, which can be used to purchase or sell foreign currencies. Trump’s crypto group had planned to explore potentially creating the stockpile with cryptocurrencies seized in law enforcement actions.
