First, we got a president-sponsored meme coin. Then we got a crypto-friendly face leading the SEC. Finally, yesterday President Trump announced perhaps the most substantial crypto-forward move: Building a US crypto strategic reserve.
Trump wrote via a Truth Social post that he plans to sign an executive order to “move forward on a Crypto Strategic Reserve”—a policy he first touted at the Bitcoin Conference last July. But here’s the curve ball: Trump said that not only will the reserve include blue chip cryptos bitcoin and ethereum, but it will also be made up of names we could have made up and you wouldn’t notice altcoins XRP, solana, and cardano.
The prices of all those cryptocurrencies jumped after the announcement, with bitcoin surging 10% to reach about $95,000 on Sunday. The climb came after a period of stagnation for bitcoin and other cryptos in the weeks since Trump’s inauguration.
Nations usually create reserves of scarce, illiquid resources in case of an emergency. For example, the US created a strategic petroleum reserve—which is made up of underground tanks in Louisiana and Texas—in response to the 1970s oil embargo. The US also has a reserve of essential medical supplies.
But the benefits of a crypto reserve are less clear.
Even crypto bros are worried
It’s only been a day since Trump’s announcement, but the rally is already losing steam. Bitcoin ended the day down 8.80%, while XRP dropped 15.88%, Ethereum fell 15.02%, and Solana sank 17.72%.
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Like many policy decisions revealed via social media posts, there are more questions than answers about the details. For example: Can Trump legally do this? How will this technically work? And how will the government fund such a thing?
Even crypto industry bulls are rolling their eyes at the inclusion of alternative coins beyond blue-chip bitcoin, which some fear could lead to regulatory overreach, market manipulation, and could make the reserve look like a cash-grabbing grift to reward wealthy donors.
“Just Bitcoin would probably be the best option - simplest, and clear story as successor to gold,” wrote Coinbase CEO Brian Armstrong via X.
Jeff Park, the head of Alpha Strategies and a portfolio manager at Bitwise, weighed in, too. “Huge political miscalculation by Trump in underestimating just how crucial it was for the Strategic Reserve to focus solely on Bitcoin,” he wrote in a post on X.
The first-ever White House Crypto Summit will be held on Friday, chaired by Trump AI and crypto czar (yes, that is a real title) David Sacks. We’re likely to get more of an explanation then, but like many Trump policy discussions, the answers often beget even more questions. Until more clarity comes to crypto, it may be best for investors to wait and see rather than dive in today.—LB