The crypto market was on fire after President Trump said he wants to create a crypto strategic reserve.

This is something the industry hoped for when supporting President Trump and it could be moving closer to reality.

President Trump said Sunday he wants to create a crypto strategic reserve that would "include" Bitcoin (BTC 0.00%), Ethereum (ETH 0.00%), Cardano (ADA 0.00%), XRP (XRP 0.00) and Solana (SOL 0.00).

The crypto market was on fire in Sunday trading after the report, with the biggest movers being the tokens that could see huge buying pressure if a crypto reserve is created. In the last 24 hours, Cardano is up 60.6%, XRP jumped 31.7%, and Solana rose 22.6%. The larger tokens also saw triple-digit gains, with Bitcoin climbing 9.9% and Ethereum advancing 12.1%.

Earlier this year, President Trump asked his Presidential Working Group to move forward with a Crypto Strategic Reserve that would include Bitcoin, Ethereum, Cardano, XRP, and Solana, according to an official statement released by the White House. The initiative aims to enhance the U.S. financial system and maintain its global competitiveness.

The statement emphasized that the administration is exploring options to integrate crypto tokens into the reserve in a manner consistent with existing legal and regulatory frameworks. It added that the urgent need for a strategic reserve has been a recurring theme in President Trump's conversations with leading economists, institutional investors, and members of his Council of Economic Advisers.

"The President is committed to taking swift and decisive action to ensure the U.S. remains the preeminent financial and economic power in the world," the statement concluded.

While the report indicates that the government may keep the tokens it has seized as part of law enforcement activity, it's not clear if Congress would need to act to allow crypto to be part of a reserve. Digital assets are still a relatively new class of investments, and the legal framework around them is evolving.

Legal experts are already debating the legality of such a move, and with crypto itself operating in a legal and regulatory gray area, it's no surprise that this reserve is as well.

"The prospect of a U.S. crypto reserve is a significant development that could have far-reaching implications for the cryptocurrency industry and the global financial landscape," said one legal expert. "However, the constitutionality and feasibility of such a move are subjects of ongoing discussion and analysis."

It remains to be seen what will ultimately happen with any potential reserve, but obviously that didn't stop the crypto market from moving higher today.

Cryptocurrencies have been extremely volatile over the past five years, following the price of growth stocks more than inflation or any hedge to the economy. And in the last few weeks, the market has moved lower because economic indicators are showing early signs of economic weakness and even the potential for a decline in GDP, according to the Atlanta Fed's GDPNow estimate.

It's this volatility that could end up hurting the argument for a crypto reserve. Plus, ownership of most of these tokens is highly concentrated among a few people or institutions.

Since this is currently a political move, it's best to heed the usual political warnings and cautions, especially if an act of Congress is needed to start the reserve. And that caution should be considered by investors today.

I don't think the crypto reserve is a done deal given the legal gray area and slim likelihood of it passing Congress. The crypto market has already had some wins with the SEC dropping charges against numerous firms last week. The introduction of exchange-traded funds based on Bitcoin and Ethereum prices is another step forward, and others may soon follow. But buying digital tokens is another bridge that may be too far for even the most bullish investors on the blockchain.

While the moves today are big, they could also reverse if a crypto reserve doesn't happen. And the drop could unwind many bullish positions that have hoped for the year that a crypto reserve would become a reality.

I'm skeptical that today would be a great day to buy tokens given the speculative bounce and uncertain future ahead. The road ahead still looks bumpy.