United States President Donald Trump has added the names of five digital assets he wants to include in a new U.S. strategic reserve for cryptocurrencies.
Trump made the announcement on Sunday that bitcoin, ether, XRP, solana and cardano would be among these assets, and the attendant response was a spike in the market value of each.
Taking to Truth Social, Trump said that his January executive order would create a stockpile of cryptocurrencies. Trump added an hour later, “And, obviously, BTC and ETH, as other valuable Cryptocurrencies, will be at the heart of the Reserve.”
Bitcoin, the world’s largest cryptocurrency by market value, surged more than 11 per cent to USD$94,164 on Sunday afternoon. Meanwhile, Ether, the second-largest cryptocurrency, climbed about 13 per cent to USD$2,516.
According to cryptocurrency analysis company, Coingecko, the total cryptocurrency market gained more than 10 per cent, adding over USD$300 billion in value within hours of Trump’s announcement.
Trump secured support from the crypto industry for his 2024 election bid and quickly began backing their policy priorities. He will host the first White House Crypto Summit on Friday, and his family has also launched its own coins.
Read more: Tether attempt at Bitcoin mining ends in court battle
Read more: Iran takes extreme measures to keep crypto from devaluing state currency
SEC has eased off on crypto under Trump
Under his Democratic predecessor, Joe Biden, regulators targeted the industry to protect Americans from fraud and money laundering.
Conversely, under Trump, the Securities and Exchange Commission withdrew investigations into several crypto companies and dropped a lawsuit against Coinbase Global (NASDAQ: COIN).
However, in recent weeks, cryptocurrency prices have dropped sharply. As a result, some of the biggest digital currencies have erased nearly all the gains made after Trump’s election win.
Analysts say the market needs a reason to move higher, such as signs that the U.S. Federal Reserve plans to cut interest rates or a clear pro-crypto regulatory framework from the Trump administration. Reuters reported that Geoff Kendrick, an analyst at Standard Chartered, targets bitcoin to reach USD$500,000 before Trump leaves office. This price change represents an increase from its record high of USD$109,071.
Regulatory filings in the U.S. revealed that while hedge funds remain the dominant crypto buyers, banks and sovereign wealth funds are also buying. Quarterly filings showed asset managers increased allocations to U.S. ETFs tied to the spot bitcoin price in the Q4, 2024.
Analysts and legal experts are divided on whether Congress will need to act to establish the reserve. Some argue the U.S. Treasury’s Exchange Stabilization Fund could create the reserve, as it can purchase or sell foreign currencies. Trump’s crypto group planned to explore potentially creating the stockpile with cryptocurrencies seized during law enforcement actions.
