Trump's crypto market roar into March

The cryptocurrency market roared into March full of optimism, recouping some of the losses from the asset class's worst month

The cryptocurrency market roared into March full of optimism, recouping some of the losses from the asset class’s worst month since 2022, after US President Donald Trump once again talked up his plan for a strategic crypto reserve.

The inclusion of the XRP and ADA tokens in Trump’s announcement were surprising, according to Andrew Tu, head of sales at crypto market maker Efficient Frontier. Both tokens had huge rallies on Sunday (Mar 2), leading gains across most digital assets.

Still, many of the details of Trump’s plan are unknown, including how much the government will actually buy and how the purchases would be funded.

“If expectations do not meet reality, then markets can potentially retreat again,” Tu said. “For now, all the bearishness of the past week has been forgotten by markets,” he said, while adding that macroeconomic concerns are still an overhang that could cause crypto prices to retreat again should equities do the same. .

Trump had vowed to create a strategic Bitcoin reserve on the campaign trail, one of many crypto-related promises that helped fuel a surge in prices up until the day of his inauguration.

While the Securities and Exchange Commission (SEC) has dropped several cases and investigations into crypto companies in the early weeks of the Trump administration, little had been said about a strategic reserve since he took office. David Sacks, the president’s artificial intelligence and crypto czar, said on Feb 4 that administration officials still needed to study the feasibility of the plan.

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Trump’s crypto-related executive order – issued in January – did not mention any specific tokens and referred only to the possibility of a “national digital asset stockpile”, the potential creation and maintenance of which should be evaluated by a White House working group.

The lack of an explicit mention of Bitcoin in the January executive order disappointed some of the largest digital token’s most outspoken supporters, who had months earlier been engaging in frantic anticipation of a “Bitcoin Fort Knox”.

Bitcoin had fallen as much as 28 per cent from its last record above US$109,000 on Jan 20, the day of Trump’s inauguration, to Friday. It posted an 18 per cent drop in February. The Bloomberg Galaxy Crypto Index sank 28 per cent in February, its worst month since the “crypto winter” of 2022 that included the failure of Sam Bankman-Fried’s FTX exchange. .

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In a Truth Social post on Sunday, Trump said the executive order on crypto “directed the Presidential Working Group to move forward on a Crypto Strategic Reserve that includes XRP, SOL, and ADA”.

A second Truth Social post, published a little more than an hour later, added: “Obviously, BTC and ETH, as other valuable Cryptocurrencies, will be at the heart of the Reserve. I also love Bitcoin and Ethereum”.

Bitcoin jumped 9 per cent to above the US$94,000 level on Sunday afternoon in New York. Ether, the second-largest digital token, rallied nearly 13 per cent to above US$2,500.

Ripple, Cardano rally

Cardano, the cryptocurrency commonly known by its symbol ADA, surged more than 50 per cent following the posts. SOL, short for the Solana blockchain’s namesake token, jumped more than 20 per cent and the Ripple-associated XRP rallied 30 per cent.

Trump’s comments “have resulted in participants rushing to reestablish long positions and are serving as a spectacular tailwind for prices”, said Spencer Hallarn, global head of OTC trading at crypto investment firm GSR.

Dining with Trump

Earlier in February, Trump had shared a CoinDesk story about Ripple chief executive officer Brad Garlinghouse on Truth Social, stoking both cheers from XRP fans and grumbling among other crypto executives.

Garlinghouse had said in December that his digital payments company planned to donate US$5 million worth of XRP to Trump’s inauguration festivities.

Prior to the inauguration, which attracted similarly sizeable donations from a range of crypto personalities, Garlinghouse was photographed dining with the president at Mar-a-Lago, accompanied by Ripple’s chief legal officer, Stu Alderoty.

San Francisco-based Ripple Labs was sued in 2020 by the SEC, which claimed the company was offering unregistered securities. A US district court later found that XRP was a security when sold to institutional investors but not when sold to retail investors, which was seen