- Former President Trump announces crypto reserve plans including XRP, ADA, SOL, BTC and ETH, driving significant price increases
- Industry leaders express concerns about government picking specific cryptocurrencies and using taxpayer funds
- Questions arise about regulatory oversight and the appropriateness of government cryptocurrency reserves
Former President Trump’s announcement on Truth Social about establishing a U.S. cryptocurrency reserve featuring XRP, Cardano (ADA), and Solana (SOL) has triggered substantial market movements, with ADA surging 44%, XRP rising 14%, and SOL gaining 11% following the disclosure.
The announcement, which was later amended to include Bitcoin and Ethereum, follows an executive order issued during the initial week of Trump’s current term that established a working group to explore the creation of such a reserve. The group is scheduled to convene this week as part of a White House Crypto Summit.
The selection of specific cryptocurrencies has drawn criticism from industry leaders. Coinbase CEO Brian Armstrong suggested that Bitcoin alone might suffice, proposing that any broader portfolio should be based on market capitalization rather than selective choices.
Concerns about potential insider trading have emerged, prompting crypto czar David Sacks to announce his divestment from all cryptocurrency holdings. The announcement has placed both the CFTC and SEC under pressure to investigate possible trading violations.
Swiss digital asset bank Sygnum provided context, stating: “Such a measure would serve to fully legitimise Bitcoin, which is already widely regarded as a store of value and alternative to Gold by a growing number of TradFi institutions.”
However, early Trump supporter and Palantir founder Joe Lonsdale raised concerns about the use of taxpayer funds. Cryptocurrency expert Nic Carter highlighted that any substantial investment would require Congressional approval and could be reversed by future administrations.
The proposal raises questions about the United States‘ position in global asset management. Unlike countries with centrally controlled economies like China or nations with surplus oil revenues like Norway, the U.S. has traditionally maintained a different approach to government asset holdings.
The debate continues over whether cryptocurrency reserves align with traditional government resource management practices, particularly given that Bitcoin and other cryptocurrencies are non-productive assets, unlike strategic resources such as oil. The U.S. currently holds significant gold reserves valued at approximately $750 billion, which some argue provides precedent for cryptocurrency holdings.
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