Trump's New US Crypto Reserve Will Include Bitcoin and Ethereum

The move comes before a first-ever White House Crypto Summit on Friday and represents a considerable turnaround in US policy.

Following his Sunday announcement, values of the named currencies, including Bitcoin, soared, after what has been a weeks-long slump.

The move comes ahead of a first-ever White House Crypto Summit on Friday and marks a stark shift in US policy. Former President Joe Biden’s administration cracked down on the industry because of suspicions of fraudulent transactions. Trump himself was a crypto skeptic during his first term as president. At the time, he had called Bitcoin – the largest cryptocurrency – a “scam”.

In his Sunday announcement, though, Trump slammed the Biden-era policies, calling them “corrupt”.

“This corrupt & incompetent administration has been attacking crypto, but they’ll never succeed. We are ALL IN on crypto. Smaller currencies like XRP, Cardano & Solana will form part of the new national crypto stockpiles. We will also be building up our holdings of BTC, ETH & smaller coins. The US is becoming a crypto powerhouse!,” Trump stated in a post on X, formerly Twitter.

He added: “And obviously, BTC and ETH, the two largest, will be at the heart of the Reserve. We will be making sure the US is the crypto capital of the world. We are making America great again!”

Here’s what you need to know about the new US crypto reserve:

In his posts on Sunday, Trump initially mentioned that smaller currencies – XRP, Cardano, and Solana – would form part of the new national crypto stockpiles.

However, about an hour later, the president in a separate post said “and obviously, BTC and ETH…will be at the heart of the Reserve,” referring to Bitcoin and Ethereum, the top two cryptocurrencies by market value.

Markets immediately reacted favourably to the post with Cardano jumping about 60 percent to $1.25 from a previous $0.65, according to Coinbase crypto exchange – although by Monday it had again settled to about $0.97. Solana increased from about $150 to $170 and XRP jumped from $2.25 to $3, both currencies surging at rates of about 12 and 20 percent, respectively.

Meanwhile, Bitcoin and Ethereum gained more than 10 percent, with Bitcoin reaching $94,000 from a previous $86,000.

During his campaign, Trump courted the crypto industry and promised aggressive measures in support of the currencies once in power. Following his election win in November, the cryptocurrency market witnessed unprecedented surges – Bitcoin, for example, reached an all-time high of $109,000. However, the market slowed in the weeks after.

Trump and First Lady Melania Trump in January launched their own meme coins – digital currencies inspired by viral trends but that lack the financial or technological backing of actual cryptocurrencies.

Elon Musk, who leads Trump’s government efficiency drive, also frequently promotes cryptocurrencies on his social media network X (previously Twitter).

Owning digital currencies like Bitcoin is increasingly seen by governments as an alternative store of value, such as gold, and as a hedge against inflation. But some experts say the crypto market is highly volatile and witnesses price swings making it a risky bet as an alternative store of value — especially when compared against gold.

Many countries that hold digital currencies seized in criminal investigations would be able to use cryptocurrencies as legal tender.

Switzerland plans to decide on crypto reserves after a public referendum, while Brazil, Germany, Hong Kong, Poland and Russia are considering or taking steps to build them.

The US government currently has the largest cryptocurrency holding of any country — 200,000 Bitcoin — and Trump’s stance is seen as increasingly lending further credibility to different coins. If plans for the US crypto reserve go forward, more countries will likely wade into the game because of the US’s outsized influence as the world’s largest economy.

Trump’s crypto push will position America ahead of the curve, giving it considerable sway over how international crypto regulations emerge later on.

And if the US government, through a reserve, holds a substantial chunk of the global volume of crypto tokens, it would be in a position to reduce the price volatilty curtentyluy associated with these digital currencies.

In July 2024, Republican Senator Cynthia Lummis introduced a Bitcoin Act in Congress, which mandated all government-held Bitcoin to be transferred to the US Treasury and pushed for the establishment of a crypto reserve. Lummis also said such a reserve would help the US manage its current Bitcoin holdings in a transparent manner.

“Bitcoin is transforming not only our country but the world and becoming the first developed nation to use Bitcoin as a savings technology secures our position as a global leader in financial innovation,” she said.

The bill is still in consideration.

The only other strategic or emergency reserves the US owns are its huge oil stocks, known as the Strategic Petroleum Reserve (SPR), in Louisiana and Texas.