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Acting editor-in-chief
Gary McFarlane
Acting editor-in-chief
Gary McFarlane
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Why Trust Cryptonews
Bitcoin, Ethereum, XRP, Solana (SOL), and Cardano (ADA) crypto prices all soared on Sunday after President Trump appeared to confirm that the US government would establish a strategic crypto reserve.
Since the announcement and the price run-up that took bitcoin back above $94k, prices have come off the boil a little, perhaps after the realization that to actually buy substantial amounts of crypto it will require the passage of legislation through Congress.
Susannah Streeter, head of money and markets and broker Hargreaves Lansdown, puts it this way:
There’s been a sharp recovery in Bitcoin and other digital currencies as Trump gave more details about a strategic reserve fund crypto bulls had been holding out for. Posting on social media, the President pledged that Bitcoin, Ethereum, XRP, Solana and Cardano would be included in this fund. It’s unclear if the US government intends to go on a buying spree in the crypto market, or whether it will simply use the crypto seized from criminals to bulk it out. It’s also not known how the US government intends the fund to be managed. Despite the lack of details, the pledge has reinvigorated the crypto market, with Bitcoin surging back above $94,000 before falling back again. Volatility is set to remain the name of the game until more is known about how the fund will operate, and crypto is also set to stay influenced by the broader investor outlook.
Susannah Streeter, Hargreaves Lansdown
Although Bitcoin could soon be trading back above $100,000, altcoin season is still some way off, according to CoinMarket Cap’s measure. But bear in mind that its altcoin season index is a backward-looking indicator.
There are also doubts about the altcoins included in a US government strategic crypto reserve, in particular Ripple’s XRP.
Of the total supply of 99.98 billion XRP tokens, 40 billion are held in escrow and released at an emission rate of 1 billion a month.
It begs the question: Would US taxpayers be happy for their government to enrich a private company through purchases that would drive up the price of its token? Ripple CEO Brad Garlinghouse had dinner with Trump in early January.
Strategic crypto reserve: a digital gold rationale, but how do the alts fit in?
Still, the market would probably do well at this juncture not to underestimate Trump’s ability to get his own way with Congress, even if the pushback from fiscally responsible conservatives is likely to be much stronger than it was, at least in the House of Representatives, with the budget bill.
As crypto skeptic Peter Schiff put it, if gold is treated as a reserve asset, then why not Bitcoin digital gold too? By the way Schiff doesn’t support the strategic crypto reserve but understands why Bitcoin would be in there, but not the four altcoins.
The bitcoin-centric view might be adopted by other countries, if they do go down the strategic crypto reserve route.
Coinbase’s Brian Armstrong is another who would prefer that just Bitcoin be treated as a reserve asset:
As well as raised eyebrows about XRP in the reserve, ADA has also been questioned by renowned crypto sleuth ZachXBT, citing a lack of stablecoin interaction:
Regarding XRP and ADA, Antanas Guoga (aka Tony G), chairman of publicly listed Sol Strategies (CSE: $HODL OTC: $CYFRF), makes a similar point:
Let the sovereign and institutional strategic reserve FOMO begin
Upon full digestion of the ramifications of the Truth Social posts, the prospect of the outbreak of fierce competition between nation-states to stack the most bitcoin is a real possibility.
China’s ‘two sessions’ policy meetings start on Tuesday, and the market will be analyzing every word for signs of the possibility of reserve-asset diversification in a crypto direction.
The main political advisory body, the Chinese People’s Political Consultative Conference (CPPCC), and the parliamentary organ, the National People’s Congress (NPC), will both open their annual meetings tomorrow.
Wide-ranging economic stimulus measures are likely to be announced by Premier Li Qiang. Tuesday is also the deadline for the introduction of more US tariffs on US imports from China, as well as on Canada and Mexico.
Russia will be another country to watch for evidence of the state buying bitcoin, if not other crypto. More than 600 Russian crypto mining companies have now joined a national register with the country’s tax authority.
Three more strategic crypto reserve takeaways you might have overlooked
We should consider at least three other takeaways from the strategic crypto reserve news. One obvious one is that the US taxpayer could be on the hook for future bailouts when crypto prices go south.
Secondly, other countries may welcome the US move because it could contribute to the destabilization of Pax Americana and the dollar that supports it. In such a reading, they might sit on the sidelines and wait to see what happens in the next bear market implosion.
Thirdly, and more positively for crypto, Trump’s latest pronouncement may broaden the basket of altcoins that will attract investing interest from those countries and institutions inclined to become more deeply involved in crypto. They may be encouraged to seek out opportunities beyond the so-called ‘American coins’ Trump mentioned. For instance, ‘made in China‘ coins could be contrarian beneficiaries of the US move.
It was a surprise that altcoins were included in the reserve, but on reflection, it makes sense. The three coins mentioned (XRP, SOL, and ADA) in the first of Trump’s two posts are seen as ‘American coins’, and in the case of Solana, it has emerged as the ‘Trump coin’ because of the president’s meme coin connection.
Someone in the know bet $72m on BTC and $123m on ETH with 50x leverage
It was also striking that Bitcoin and Ethereum were both omitted from Trump’s initial post, instead featuring as an afterthought in a later Truth Social message. This will add grist to the mill of those who hate the smell of (alleged) corrupt insider dealing in the morning – Sunday morning to be precise. Someone made a killing:
…and, again, Schiff is not holding back:
Solana is Trump’s favorite – it is probably time to get some exposure to the SOL ecosystem
Although Asia has seen some selling, the upward march of Bitcoin, Ethereum, XRP, Solana, and Cardano prices resumed in the European session.
Bitcoin is up 7.6% in the past 24 hours to $92,621 and Ethereum 5% at $2,354. However, the big moves are XRP advancing 17% to $2.64, Solana 12% higher at $161, and Cardano’s impressive 46% gain to $0.972.
Solana is probably Trump’s favorite of all the altcoin reserve candidates because it is the home of his $TRUMP coin, now off its near-term lows to trade at $15.05, 6.75% higher in the past 24 hours.
So much for decentralization. Trump 2.0 era bitcoin, and by extension the rest of crypto, has a strong whiff of centralization about it:
Ironically, a currency that was designed to be isolated from government interference and decentralized, is now reliant on the US government for its fortunes
Kathleen Brooks, research director at XTB
Although all coins were down in the recent pullback, Solana had the extra overhang of a large token unlock related to the FTX estate.
However, mass selling from that direction has not materialized in the way that some feared, so Solana might be expected to see the benefits of some pent-up buying activity.
If you’re on the prowl for high risk-reward Solana ecosystem exposure, Solaxy (SOLX) may be worth a look – it is the first Layer 2 on the Solana blockchain and still in presale.
In an indication of the depth of the backing the new project has garnered, on Sunday one whale bought $210k worth of SOLX:
https://etherscan.io/tx/0x6ab6ff67c4d606b42a4dfd11e2b404164e0ce7991542f859d2ceba041814e146
And for latecomers seeking Bitcoin exposure, why not consider BTC Bull token?
No matter how the strategic crypto reserve debate plays out, altcoin season could be off to the races soon. Place your bets.
