Cryptocurrencies Soar After Donald Trump Announces the Creation of a Strategic Crypto Reserve for the United States

Cryptocurrencies saw a major rally on Sunday after former U.S. President Donald Trump announced the creation of a Strategic Crypto Reserve for the United States.

Cryptocurrencies displayed substantial gains on Sunday after former U.S. President Donald Trump announced the establishment of a Strategic Crypto Reserve for the United States, which will encompass major digital assets.

In a post on Truth Social, Trump unveiled plans for the reserve, an initiative designed to bolster the U.S. crypto sector following what he termed “years of corrupt attacks by the Biden Administration.” He stated that his Executive Order on Digital Assets had mandated the Presidential Working Group to proceed with establishing the reserve.

“A U.S. Crypto Reserve will elevate this critical industry. We will make sure the U.S. is the Crypto Capital of the World!” Trump remarked.

He further disclosed that Bitcoin (BTC) and Ethereum (ETH) would form the core of this reserve, referring to them as “valuable cryptocurrencies.”

Following the announcement, the crypto market reacted swiftly:

* Bitcoin (BTC) experienced a surge of over 2.5% in the past hour, reaching $48,764.

* Ethereum (ETH) also saw a rise of more than 1.5%, pushing it to $1,705.

* XRP followed suit with a 0.6% increase, reaching $0.41.

* Solana (SOL) saw a surge of over 4% to $42.66.

* Cardano (ADA) also experienced gains, rising by 0.4% to $0.32.

Investors and industry experts will closely watch for details about the crypto reserve’s structure, purpose, and implementation at the first-ever White House Crypto Summit on Friday.

This marks a shift in Trump’s stance, as he previously proposed a “Bitcoin stockpile” rather than a “Crypto Reserve.” While a stockpile suggests holding onto Bitcoin, a reserve would entail actively purchasing and managing digital assets over time.

The idea of a national Bitcoin reserve first gained traction when Trump introduced the concept at Bitcoin 2024 in Nashville last year. Around the same time, Wyoming Senator Cynthia Lummis proposed a national strategic Bitcoin reserve, adding momentum to the discussion.

After Trump’s re-election in November, calls for a U.S. Bitcoin reserve intensified, driving Bitcoin’s price to new all-time highs. However, some of this enthusiasm faded after Trump’s January executive order, which only mentioned the possibility of a “digital asset stockpile” rather than a dedicated Bitcoin reserve.

While many in the crypto community welcomed the news, some industry leaders expressed concerns over the inclusion of altcoins like XRP, Solana, and Cardano.

Financial experts are concerned that a U.S. Crypto Reserve could challenge the U.S. dollar’s dominance in global markets. There are also concerns that a future administration could reverse this policy, potentially selling off crypto assets to cover government expenses.

Adam Blumberg, co-founder of Enclave Group, expressed his skepticism: “The next election could bring a new administration that needs money for debt, Social Security, etc. They could sell the reserve.”

Blumberg also had doubts about the government owning a decentralized asset like Bitcoin: “Bitcoin was not created to be owned by governments. It gives too much power to the federal government, which operates in a short-term cycle.”

Trump’s announcement has reignited discussions about how the U.S. government should approach cryptocurrencies.

While the plan for a Strategic Crypto Reserve could position the U.S. as a global leader in digital assets, it also raises new economic, regulatory, and political questions.

For now, all eyes are on Friday’s White House Crypto Summit, where Trump is expected to provide more clarity on his administration’s vision for the future of crypto in the U.S.

The Information is Collected from CNBC and BBC.