Bitcoin and several other cryptocurrencies experienced a sharp rally on Monday following a statement from former U.S. President Donald Trump indicating their inclusion in a new U.S. strategic reserve.
Trump announced on Truth Social that his January executive order concerning digital assets would create a reserve that included Bitcoin, Ether, XRP, Solana, and Cardano. Bitcoin and Ether would be at the core of this reserve, he stated. The announcement caused Bitcoin to surge over 20% from its recent lows, trading around $94,154, up from $78,273 on Friday. Ether increased by a fifth over the weekend, reaching $2,482. XRP rose 38%, Solana 20%, and Cardano 78%.
Chris Weston, head of research at Pepperstone, an Australian online broker, described Trump’s announcement as “clearly a positive shock to the crypto scene and a shot in the arm for a market desperately in need of a catalyst to alter the bear trend lower.” Weston speculated the rally might continue into Friday’s White House Crypto Summit, although potential negative sentiment from other markets could pose a risk.
While the stock market closed higher on Friday, recent declines in technology stocks, such as Nvidia, have impacted confidence in Bitcoin, considered by some as an alternative tech proxy. Bitcoin fell more than 17% in February, marking its largest monthly percentage drop since June 2022 and losing over a third of its value since peaking at $105,000 in early January.
The rally following Trump’s November election was initially fueled by expectations he would champion a strategic Bitcoin fund and relax the previous administration’s regulatory approach. However, apart from some appointments of crypto-friendly officials, concrete policy details have been scarce for investors.
IG market analyst Tony Sycamore noted the announcement had boosted prices but raised concerns about funding the reserve: either from U.S. taxpayers or from cryptocurrencies seized in law enforcement actions. Sycamore explained that the latter “isn’t anywhere near as bullish as it simply represents a transfer between accounts rather than new buying entering the market.”
