U.S. Crypto Strategic Reserve Likely

A U.S. crypto strategic reserve appears more likely following President Trump’s weekend announcement, according to a research report by Wall Street bank Citi.

The President stated that XRP, Solana (SOL), and Cardano (ADA) would be part of a strategic reserve, and later added Bitcoin (BTC) and Ether (ETH) to this list of assets.

Analyst Alex Saunders noted, “The announcement of further plans for the U.S. government potentially to become a strategic holder of digital assets would add to the perceived legitimacy” of this asset class.

Citi highlighted that the U.S. government currently possesses around $19 billion in cryptocurrencies, predominantly in Bitcoin, compared to $750 billion in gold. The majority of these holdings stem from seizures, which means accumulation of other digital assets may rely on open-market purchases.

However, the report pointed out that “selection criteria are not currently clear,” and pre-announcing such investments may lead to market price fluctuations. This issue was seen in the late 1990s when the U.K. government faced similar challenges with gold.

Further clarification on how tokens will be selected for inclusion in the reserve would enhance support for this initiative, Citi stated.

Broker Bernstein suggested that the Federal Reserve could issue debt or sell parts of its gold reserves to finance these cryptocurrency acquisitions in a report from last month.

Read more: U.S. Crypto Task Force to Focus on Delivering National Bitcoin Reserve: Bernstein