#cryptonews
In a pretty random post on Sunday, Donald Trump announced that the U.S. is creating a “crypto strategic reserve.”
The president initially confirmed that XRP, SOL and ADA would be included — hastily adding a couple of hours later that BTC and ETH are going to be at the “heart” of this stockpile.
But much of these gains have since been reversed, with stock markets tanking as new tariffs targeting Mexico and Canada came into force.
Crypto markets rallied on the news, with Bitcoin nearing $95,000 and Cardano smashing through $1 for the first time since 2022.
About 200,000 BTC has been seized from criminals in recent years — meaning that this could be used as a starting point for the reserve, instead of coins being auctioned off. According to The New York Times, there has been a suggestion that a new tax — which would serve as a levy on stablecoin transactions — could be used to generate investable funds.
Trump’s plan for a strategic Bitcoin reserve made sense, as it wouldn’t have to cost taxpayers a dime.
Allegations are swirling that certain crypto companies, Ripple among them, have been lobbying hard for inclusion in a U.S. reserve — with Brad Garlinghouse warning against “Bitcoin maximalism.”
You could argue that this reserve is meant to serve as a showcase for cryptocurrencies created in the US of A, but that theory falls flat when you consider that the Cardano Foundation is based in Switzerland.
Perhaps the fairest way of doing this would be to determine the allocation based on each digital asset’s respective market cap. At the time of writing, that would mean Bitcoin represents 77% of this crypto strategic reserve — with Ether on about 11.5%, XRP on 6.5%, SOL on 3.5%, and ADA on 1.5%.
This is a significant question — the answer to which could cause these five named cryptocurrencies to surge substantially or crash dramatically.
You could imagine there’s a great temptation to add Dogecoin, it inspired the name of an entire government department after all. And while you’d think the White House wouldn’t be so brazen to add $TRUMP to this reserve, nothing can be ruled out with an administration as unpredictable as this.
There would be little point adding stablecoins like USDC and USDT — they’re designed to be pegged to the dollar, so wouldn’t deliver much pricewise.
Professional Capital Management founder Anthony Pompliano had an interesting theory here, telling Fox Business: “I wonder if Trump is actually trying to negotiate. If you go and think of the art of the deal, everything is negotiated. He’s asking for five or six assets — and as it works through the political process, he’s then willing to give up a bunch of them and end up with a Bitcoin-only reserve. I don’t know if that’s what he’s doing or not, but I sure hope so.”
Very possibly — and while there is bipartisan support for clearer regulation, a reserve containing volatile altcoins might be a little too much for lawmakers to stomach.
However, many countries will probably end up giving these altcoins a wide berth.
The consensus seems to be this: major economies will sit up and take notice if the U.S. is creating a reserve that includes Bitcoin.