TLDR
- In a sweeping move, Trump announced the establishment of a U.S. strategic crypto reserve that includes Bitcoin, Ethereum, XRP, Solana, and Cardano, leading to significant price hikes of 10-60% for these assets.
- Following Trump's announcement, Bitcoin surged to a remarkable $94,164, with Ethereum also climbing to an impressive $2,516.
- This Friday, Trump is set to spearhead the inaugural White House Crypto Summit, signaling a deepening of governmental involvement in the cryptocurrency space.
- Under Trump's leadership, the SEC has decided to pull back on investigative actions against crypto businesses and has dismissed the lawsuit targeting Coinbase.
- According to a Standard Chartered analyst, Bitcoin has the potential to soar to $500,000 before Trump's term concludes.
President Trump has rolled out plans for a U.S.-based strategic crypto reserve that will encompass five principal digital currencies: Bitcoin, Ethereum, XRP, Solana, and Cardano. The information broke on Sunday with a post on Trump's preferred social media outlet, Truth Social.
The announcement had an immediate electrifying effect on the markets: Bitcoin shot up by more than 11%, reaching $94,164, while Ethereum saw a jump of about 13%, hitting $2,516.
The digital currency XRP experienced a notable boost, increasing by 33% after the news broke. Similarly, Solana's token surged by 25%, and Cardano's coin experienced a jump of more than 60%.
In a matter of hours following Trump's announcement, the overall worth of the cryptocurrency market swelled by over $300 billion, underscoring the speculative excitement about potential government interplay with the crypto domain.
Trump made the revelation via two distinct posts. The initial announcement featured XRP, Solana, and Cardano, whilst a subsequent update affirmed Bitcoin and Ethereum's central roles within the Reserve.
This move marks a departure from Trump's earlier dialogue. Last year, he had only alluded to possibly amassing Bitcoin during the Bitcoin 2024 conference in Nashville.
Trump's administration is adopting a relatively relaxed attitude compared to past administrations. Under Biden, there was a generally more restrictive approach toward cryptocurrencies.
Market Impacts and Institutional Embrace of Cryptocurrencies
Recently adjusted regulatory oversight indicates a forthcoming change in direction. The SEC has stepped back from several probes into cryptocurrency firms and has retracted a lawsuit against Coinbase, a major U.S. crypto exchange.
Trump's plans include hosting the first-ever White House Crypto Summit this Friday, likely to shed more light on the proposed strategic reserve.
Legal experts debate the reserve's operational framework, with some suggesting the use of the U.S. Treasury’s Exchange Stabilization Fund could be a viable pathway due to its currency acquisition powers.
A novel idea being considered is incorporating cryptocurrencies seized through law enforcement as part of the reserve, providing an initial batch of digital assets.
Market pundits offer varied perspectives. From Standard Chartered, Geoff Kendrick foresees Bitcoin Bitcoin reaching a potential $500,000 before Trump's presidency wraps up.
Recently surfaced regulatory filings suggest increasing appetite for crypto from institutional quarters. Many banks and sovereign wealth funds have joined hedge funds in procuring crypto assets.
Across the board, asset managers are noticeably tilting their allocations towards U.S. ETFs linked to spot Bitcoin price performance, as revealed by the fourth-quarter 2024 filings.
The crypto community holds mixed views on the government's proposed plan. While some advocate for Bitcoin's exclusivity in a reserve, others question the need for any governmental cryptocurrency reserve.
