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U.S. President Donald Trump announced the inclusion of five digital assets in a proposed strategic reserve. The selected cryptocurrencies—Bitcoin, Ethereum, XRP, Solana, and Cardano—saw their market values soar within hours of the revelation. Bitcoin alone surged over 11% to $94,164, while Ethereum jumped 13% to $2,516, according to data from CoinGecko. The overall crypto market cap spiked by over $300 billion in response.
Trump's declaration, made via his Truth Social platform, follows his January executive order to establish a national digital asset stockpile. While the specifics remain unclear, the initiative has fueled optimism among crypto investors and policymakers who support broader institutional adoption of digital assets. Federico Brokate, head of U.S. business at 21Shares, noted, "This move signals a shift toward active participation in the crypto economy by the U.S. government."
However, industry experts are divided. James Butterfill, head of research at CoinShares, expressed surprise at the inclusion of assets beyond Bitcoin, stating, "Unlike Bitcoin, these assets are more akin to tech investments." His remarks highlight concerns that the selection criteria may be politically driven rather than based on fundamental strengths of the cryptocurrencies themselves.
Trump's pivot to crypto-friendly policies marks a stark contrast to the approach taken by his predecessor, Joe Biden. Under Biden's administration, regulatory bodies such as the Securities and Exchange Commission (SEC) aggressively pursued legal actions against major crypto firms, citing fraud and money laundering risks. In a notable reversal, Trump's SEC has since dropped its lawsuit against Coinbase, the largest U.S. crypto exchange, and scaled back investigations into multiple crypto firms.
The timing of Trump's announcement aligns with his ongoing efforts to secure industry support ahead of the 2024 elections. His campaign has actively courted crypto stakeholders, including Ripple Labs, which recently backed a super PAC to sway congressional elections in favor of pro-crypto candidates.
Despite the excitement, legal experts remain skeptical about the feasibility of a national crypto reserve. Some analysts suggest it could be implemented through the U.S. Treasury's Exchange Stabilization Fund, traditionally used to manage foreign currency reserves. Others argue that congressional approval would be necessary, raising concerns about potential political roadblocks.
Market analysts, including Geoff Kendrick of Standard Chartered, predict Bitcoin could reach $500,000 before Trump's term ends. However, they emphasize that sustained growth hinges on favorable regulatory policies and potential Federal Reserve interest rate cuts.
