WEST PALM BEACH, Florida, March 2 (Reuters), U.S. President Donald Trump has revealed the names of five digital assets that will be included in a new U.S. strategic reserve of cryptocurrencies. The announcement, made on Truth Social on Sunday, immediately sent the market value of each of the selected cryptocurrencies soaring.
Trump’s January executive order on digital assets had previously outlined the creation of this reserve, but until now, the specific currencies had not been disclosed. According to his post, the reserve will include Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA).
More than an hour later, Trump followed up with another post emphasizing that Bitcoin and Ethereum, as two of the most valuable cryptocurrencies, would be at the core of the reserve.
Bitcoin and Ethereum see double-digit gains
Following Trump’s announcement, the cryptocurrency market experienced a rapid surge. Bitcoin, the world’s largest cryptocurrency by market value, jumped more than 11% to reach $94,164 by Sunday afternoon. Ethereum, the second-largest cryptocurrency, climbed 13% to $2,516.
The broader cryptocurrency market gained approximately 10%, adding more than $300 billion in value within hours of Trump’s statement, according to CoinGecko, a cryptocurrency data and analysis firm.
XRP’s political and financial influence
XRP, a cryptocurrency linked to Ripple Labs, was among the five assets named for the reserve. Ripple Labs has been actively involved in U.S. politics, backing a super PAC that aims to influence congressional elections in favor of pro-crypto policies.
“This move signals a shift toward active participation in the crypto economy by the U.S. government,” said Federico Brokate, head of U.S. business at 21Shares, a digital assets investment management firm. “It has the potential to accelerate institutional adoption, provide greater regulatory clarity, and strengthen the U.S.’s leadership in digital asset innovation.”
Industry reactions to the reserve’s composition
While Bitcoin and Ethereum’s inclusion was widely expected, some analysts were surprised to see other cryptocurrencies make the list. James Butterfill, head of research at CoinShares, noted that the selection suggests a broader embrace of crypto technology beyond just Bitcoin.
“Unlike Bitcoin, which has been seen as digital gold, these other assets are more akin to technology investments,” Butterfill said. “The announcement suggests a more strategic approach toward supporting U.S. interests in blockchain technology, rather than focusing purely on store-of-value assets.”
Trump’s relationship with the crypto industry
Trump has gained significant support from the cryptocurrency industry in his 2024 election bid and has swiftly moved to back its policy priorities. His administration is set to host the first White House Crypto Summit on Friday, further reinforcing his commitment to the sector. Additionally, his family has launched its digital assets, further intertwining his political and business interests with the crypto market.
Under the previous administration of Democrat Joe Biden, regulators took a stricter stance on the industry, implementing measures to protect Americans from fraud and money laundering. In contrast, Trump’s Securities and Exchange Commission (SEC) has withdrawn investigations into several crypto companies and recently dropped a lawsuit against Coinbase, the largest crypto exchange in the U.S.
Challenges facing the crypto market
Despite Trump’s favorable stance, the cryptocurrency market has faced sharp declines in recent weeks. Many major digital assets have erased nearly all of the gains they made following Trump’s election victory, which initially triggered excitement within the industry.
Analysts suggest that the market needs a clear catalyst to regain upward momentum. Possible triggers include signals from the U.S. Federal Reserve regarding interest rate cuts or the implementation of a well-defined pro-crypto regulatory framework from the Trump administration.
Predictions for Bitcoin’s future
Standard Chartered analyst Geoff Kendrick has projected that Bitcoin could reach an astonishing $500,000 before the end of Trump’s term. This forecast stands in stark contrast to Bitcoin’s current record high of $109,071.
Regulatory filings in the U.S. indicate that while hedge funds remain dominant crypto buyers, banks and sovereign wealth funds are also increasing their allocations. Recent quarterly filings showed that asset managers significantly boosted investments in U.S. exchange-traded funds (ETFs) tied to spot Bitcoin prices in the fourth quarter of 2024.
Will Congress need to act?
There is ongoing debate among analysts and legal experts regarding whether an act of Congress will be required to establish the cryptocurrency reserve. Some believe that the U.S. Treasury’s Exchange Stabilization Fund, which has historically been used to buy and sell foreign currencies, could be leveraged to create the reserve without congressional approval.
Additionally, Trump’s crypto advisory group is exploring the possibility of building the reserve using cryptocurrencies seized in law enforcement actions, though the specifics of this plan remain unclear.
Looking ahead
As the Trump administration moves forward with its pro-crypto policies, the industry is watching closely to see how these developments unfold. The upcoming White House Crypto Summit is expected to provide further insights into the administration’s vision for digital assets.
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