Trump Proposes Strategic National Crypto Reserve

At the Bitcoin Conference in Nashville in July, Donald Trump pledged to create a strategic national bitcoin reserve.

By Sunday morning March 2, that reserve included ether (ETH), XRP, Solana (SOL), and Cardano (ADA) alongside bitcoin (BTC).

Trump’s message on Truth Social stated his presidential working group was moving forward with the larger-scope crypto reserve, igniting extensive feedback from the crypto community.

Many complained that the reserve isn’t limited to bitcoin. Others questioned whether the U.S. should stockpile tokens like XRP and Cardano at all, and some wondered what might have caused Trump to change his mind.

Trump said he aimed to make the U.S. the “crypto capital of the world,” with his announcement timing seemingly targeted at retail traders. “I love the genius of announcing a strategic reserve on a Sunday, when traditional markets are closed and Wall Street sleeps. For the first time, retail investors win,” tweeted Trump’s son, Eric Trump, Sunday night.

The assets’ prices rose almost immediately, particularly benefiting ADA. However, significant details about the Crypto Strategic Reserve remain unclear.

Trump’s Sunday message represented the first time the administration disclosed that five assets would be included in the portfolio. Below are some pertinent questions that arise from this announcement:

1. Is He Serious?

The U.S. already owns over 200,000 BTC obtained through seizures. Experts suggest this could support a National Reserve without Congressional approval, but a multi-coin reserve would likely require new legislation.

Wyoming Senator Cynthia Lummis has proposed legislation for the U.S. to purchase $20 billion in the first year and an additional 20,000 BTC in each of the next four years, aiming for a total of one million BTC. Lummis’s stance on the multi-coin reserve is not yet clear, as she is set to meet with industry leaders on March 11. Will she propose different legislation now?

The secondary question is how the U.S. would finance the expanded portfolio. Given that crypto is publicly traded, it’s uncertain whether the administration will seek new appropriations for spending. Could gold sales fund the crypto purchases? We don’t know.

2. Why Include Solana, XRP, and Cardano? Will Others Be Added?

Many on X have noted logical reasons for including bitcoin in a strategic reserve. “We’re talking about a reserve, and Bitcoin is the undisputed store of value for the digital age,” remarked Hunter Horsely, CEO of Bitwise. Bitcoin serves as “digital gold” and maintains over 60% market dominance.

However, making a case for other coins is more complicated. For instance, Cardano, with a dominance of 1.1%, is primarily recognized for building decentralized applications (dApps). Unlike bitcoin and ether, it lacks ETFs and notable acceptance within traditional finance.

The selection of the five coins reflects two reasons: BTC and ETH are fully decentralized, while Solana, XRP, and Cardano might be included to bolster the U.S. crypto industry. Trump’s announcement suggests the reserve could incorporate additional coins in the future.

3. Will States Follow Suit?

According to CoinDesk’s Jesse Hamilton, up to 22 states are considering establishing their own crypto reserves, primarily in bitcoin. Will they now widen their asset scope?

4. Will Crypto Support It?

The response to Trump’s announcement among crypto professionals was tepid to critical. Trump had aimed to appeal to his audience at Nashville, but it remains uncertain if the crypto industry fully supports his plan. If Congress pushes back, the administration will need backing from the industry, raising concerns among supporters. Notably, Polymaket bettors question the rapid implementation of the reserve.