US President’s Crypto Reserve Announcement

US President Donald Trump made a surprise announcement on Sunday regarding the establishment of a national strategic reserve.

Strategic Reserve Overview

Trump’s plan includes cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA). He asserted that this initiative would position the US as the Cryptocurrency Capital of the world.

While the announcement initially garnered enthusiasm in the markets, reactions cooled on Monday due to concerns over its implications.

Criticism of Altcoin Inclusion

Critics highlighted potential issues with including altcoins beyond Bitcoin and Ethereum. Industry experts voiced that these altcoins lack sufficient developer activity and decentralization compared to BTC and ETH.

Nic Carter, General Partner at Castle Island Ventures, remarked, “The government’s job is not to run a fake crypto hedge fund. It’s not their job to pick winners and losers.”

Support for Ethereum and Solana

Harrison Seletsky, SPACE ID senior manager, endorsed Trump’s diversified crypto reserve approach but criticized the choice of XRP and ADA. Seletsky argued that while Ethereum and Solana deserve inclusion due to their robust developer activity, XRP and ADA have lower Total Value Locked (TVL) and do not belong in the reserve. He stated, “The inclusion of XRP and ADA delegitimizes the concept of encompassing suitable cryptocurrencies in the reserve.”

Centralization Concerns

Alexander Blume, CEO of Two Prime Digital Assets, also voiced concerns regarding XRP, ADA, and SOL, stating they are essentially centralized tech companies. He emphasized that altcoins are in constant flux, while Bitcoin remains a decentralized product akin to gold.

Accusations of Motivations

Jean Rausis, co-founder of DeFi platform SMARDEX, suggested Trump’s announcement appears motivated by personal financial interests rather than strategic benefits. He asserted that Bitcoin and Ethereum are much more fitting for a reserve.

Focus on Bitcoin

Industry leaders largely agree that Bitcoin and Ethereum should be the primary assets in the US national reserve. Bitwise CEO Hunter Horsely noted, “I had imagined the Strategic Reserve would just be Bitcoin. That makes the most sense to me.”

*This is not investment advice.