Trump’s Strategic Crypto Reserve: How It Works and Which Coins Are In It
Over the weekend, Trump announced that his administration would be creating an official US Strategic Crypto Reserve, causing the included cryptocurrencies to surge temporarily.
President Donald Trump has unveiled plans for a US Strategic Crypto Reserve, a move that signals a significant shift in government policy toward digital assets. The reserve will include Bitcoin (BTC), Ethereum (ETH), XRP (XRP), Solana (SOL), and Cardano (ADA), according to Trump’s announcement on Truth Social.
In a post on Truth Social, President Trump wrote:
“A US Crypto Reserve will elevate this critical industry after years of corrupt attacks by the Biden Administration, which is why my Executive Order on Digital Assets directed the Presidential Working Group to move forward on a Crypto Strategic Reserve that includes XRP, SOL, and ADA. I will make sure the US is the Crypto Capital of the World. We are MAKING AMERICA GREAT AGAIN!”
Trump followed up with a second post to clarify that Bitcoin and Ethereum would also be integral to the reserve, writing:
“And, obviously, BTC and ETH, as other valuable Cryptocurrencies, will be the heart of the Reserve. I also love Bitcoin and Ethereum!”
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A Shift from Stockpile to Reserve
Trump’s proposal marks a departure from his previous plan to establish a “bitcoin stockpile,” which he first floated at the Bitcoin 2024 conference in Nashville. While a stockpile would have focused solely on holding Bitcoin obtained through law enforcement seizures, a strategic reserve implies an active approach—buying and managing a diverse portfolio of digital assets over time.
The move aligns with Trump’s broader strategy to position the US as a global leader in the crypto industry. However, it has sparked debate within the financial and crypto communities.
Federico Brokate, head of US business at 21Shares, explained:
“This move signals a shift toward active participation in the crypto economy by the US government. It has the potential to accelerate institutional adoption, provide greater regulatory clarity, and strengthen the US’s leadership in digital asset innovation.”
Market Reactions and Price Movements
Following Trump’s announcement, crypto markets surged. XRP spiked 33%, Solana’s SOL token jumped 25%, and Cardano’s ADA soared over 60%. Bitcoin, which had recently dipped below $80,000, rebounded 10% to $94,343.82. Ethereum, which has been among the worst-performing major cryptocurrencies this year, gained 13%.
However, the rally was short-lived. By Monday afternoon, Bitcoin had dropped back to around $86,000, while Ethereum tumbled 15% to $2,100. Stocks tied to the crypto sector, such as Coinbase (NASDAQ: COIN) and Robinhood (NASDAQ: HOOD), also swung lower after an initial boost. MicroStrategy (NASDAQ: MSTR), a major institutional holder of Bitcoin, saw its stock slide from a 14% morning gain to a slight decline by the close of trading.
Crypto analysts are divided on the long-term impact of Trump’s announcement. Some see it as a positive step toward legitimizing digital assets within the US financial system, while others remain skeptical.
Yuya Hasegawa, a crypto market analyst at Bitbank, argued:
“The effect of Trump’s [crypto reserve] comment will not continue. The price may go up because of other developments this week, but Trump’s comment is already digested. There was no particularly new [announcement]. They are still moving in the direction to establish the crypto reserve, it was not an announcement to actually establish it.”
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Criticism and Concerns
The proposal has not been without its detractors. Some industry leaders argue that only Bitcoin should be included in a national reserve due to its unique position as the most decentralized and battle-tested cryptocurrency. Others fear that allowing the government to hold crypto assets could lead to future interventions in the market.
Coinbase CEO Brian Armstrong gave his opinion on the matter, writing on X:
“Excited to learn more. Still forming an opinion on asset allocation, but my current thinking is 1. Just bitcoin would probably be the best option — simplest, and clear story as successor to gold 2. If folks want more variety, you could do a market cap-weighted index of crypto assets to keep it unbiased. But probably option No. 1 is easiest.”
Critics also warn that the volatility of digital assets makes them a risky choice for a national reserve. Unlike traditional reserves like gold or foreign currencies, cryptocurrencies are highly speculative and subject to extreme price swings.
Moreover, there is concern that a future administration could dismantle the reserve or sell off its holdings, undermining the long-term vision Trump has laid out.
Adam Blumberg, co-founder and vice president of advisory services at Enclave Group, stated:
“The next election could see a new administration come in and need to find money to pay debt, social security, etc. They could sell the reserve. I just don’t like the idea of the US government, or any government, owning the most decentralized asset ever. That’s not what it was created for [and puts] too much power in the hands of the federal government, which is always in a 4-year, or even 2-year, cycle.”
What Comes Next?
More details about the Strategic Crypto Reserve may emerge at Trump’s upcoming White House Crypto Summit, scheduled for Friday. The summit is expected to bring together top industry leaders, regulators, and policymakers to discuss the role of crypto in the US economy.
Nic Puckrin, co-founder of The Coin Bureau, commented:
“The first White House Crypto Summit on Friday will be crucial to watch. We will be waiting to see who will be there, what will be discussed, and whether any actual steps toward implementation are outlined. The key question is, how will they fund and legislate this reserve? Until we have some answers, there’s little substance to support this rally, and it could fizzle out as quickly as it started.”
The reserve’s creation could face legal and logistical challenges. Some experts believe an act of Congress may be required to establish it, similar to how the US Strategic Petroleum Reserve was created in 1975. Others suggest that the reserve could be funded through the US Treasury’s Exchange Stabilization Fund, which has historically been used to manage foreign currency reserves.
Investors and crypto enthusiasts will be closely watching Trump’s next moves. If the reserve gains traction, it could mark a historic moment for integrating digital assets into the US financial system. If not, it may become another short-lived crypto market catalyst.
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Disclaimer: Wealthy VC does not hold a position in any of the stocks, ETFs or cryptocurrencies mentioned in this article.
