Trump's Bitcoin Strategic Reserve Shakeup Sends Altcoins Soaring

On Sunday, President Donald Trump shook up the crypto community by making a YUGE adjustment to the nascent Bitcoin strategic reserve.

President Donald Sunday made a YUGE adjustment to the nascent Bitcoin strategic reserve.

The top cryptocurrency will now have to make room for Ethereum, XRP, Solana, and Cardano.

While the announcement instantly drove up the prices of all five assets, Bitcoin purists were not happy that DeFi tokens would be added to the stockpile.

“The US taxpayer should not be exit liquidity for cryptocurrencies that are decentralised in name only,” Naval Ravikant, a venture capitalist and Bitcoin maximalist, said in a post on X.

Saifedean Ammous, the author of The Bitcoin Standard, was equally dismissive of altcoins.

“Shitcoiners just convinced the US government to buy worthless database entries,” he wrote.

Trump pump

In any event, Trump’s post on Truth Social drew a line under a selloff that saw many dismayed as the “Trump pump vapourised.”

Bitcoin surged more than 7%, Ether about 4%, and Cardano, the big winner, a whopping 46%. Not to be left out, Trump’s own memecoin jumped 8%.

While investors may welcome relief from a swoon that saw Bitcoin hover around $80,000, many are asking poignant questions about how a strategic reserve would work and how it would be funded.

Analysts at Bernstein said that potential funding options may include reallocating US gold reserves, issuing government debt, or partnering with institutional asset managers.

No money

Arthur Hayes, the BitMEX co-founder and crypto influencer, pointed out that Congress, not the White House, controls the government’s purse strings.

If a reserve involves tapping the Federal Reserve’s balance sheet or redirecting funding approved by Congress, the administration would have to seek approval from the legislative branch.

“Without that they have no money to buy bitcoin and shitcoins,” Hayes tweeted.

As for the inclusion of altcoins, Bernstein analysts said this may be a game changer.

“Holding their native assets supports the growth of the industry,” Bernstein said in a note to clients on Monday.

“But the rationale for a sovereign to hold it in reserve is unclear.”

Indeed, whether he knows it or not, Trump has bestowed altcoins with a new level of legitimacy and reignited the simmering conflict between Bitcoin maxis and DeFi folk.

Political fallout

Moreover, the prospect of diverting taxpayer revenue into altcoins, especially as Elon Musk is slashing public programmes and federal workers are being fired, could be politically damaging.

Crypto investor Nic Carter warned that a government-controlled Bitcoin reserve could be undone in the future by a Democratic administration’s own executive order.

Crypto influencers such as Anthony Scaramucci have urged policymakers to make a Bitcoin strategic reserve fund as bipartisan as possible to ensure it has broad support and will not be vulnerable to duelling political agendas.

Market reacts

Traders, still reeling from last week’s market bloodbath that wiped out $1 trillion in value, reacted swiftly to Trump’s altcoin nod.

Bitcoin briefly surged above $95,000 but has since dropped back to around $92,000.

Ethereum rose to $2,500 but has already given back 6% of its gains in the hours that followed.

Solana surged to $180, off a sixth-month low of $125 hit on Friday. It is now changing hands at $160.

XRP quickly gained 35% last night to hit $3 and has since pulled back to $2.65.

Cardano’s ADA token reacted the strongest to the news, notching a massive 80% gain in just two hours. This put ADA back above the $1 level for the first time in a month. Its price is now $0.95.

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