Trump’s support for crypto will put America ahead of the curve and enable the US to influence the global crypto rules.
United States President Donald Trump announced that his administration would establish a national strategic crypto reserve containing five coins, with the goal in his mind of making the US “crypto capital of the world.”
The United States has about 200,000 Bitcoin, the highest possession of any country, valued at about $16.7 billion.
Trump is fulfilling his promise to crypto lobbyists during his election campaign. He has a crypto working group working hard to create this reserve.
He shook up the cryptocurrency world by announcing that XRP (Ripple), SOL (Solana), and ADA (Cardano) would be part of the newly formed US Crypto Strategic Reserve. The move represents a considerable turnaround in US policy.
The president stated that BTC and ETH would be the heart of the reserve, referring to Bitcoin and Ethereum, the two most valuable cryptocurrencies by market value.
The market immediately responded to the announcement, with Cardano increasing about 60% to $1.25 from $0.65 on the Coinbase cryptocurrency market. By Monday, it had once more levelled off at roughly $0.97. XRP increased from $2.25 to $3 while Solana jumped from $150 to $170, with both currencies rising at 12 and 20 percent, respectively.
Ethereum and Bitcoin increased by over 10%, with Bitcoin rising from $86,000 to $94,000.
Trump promised to take aggressive action to assist cryptocurrency if he took office during his campaign. After his election victory, the market saw a huge spike, especially Bitcoin surged by $109,000.
Trump and First Lady Melania Trump introduced their meme coins in January based on viral trends, but they do not have the same technological or financial support as real cryptocurrencies.
Elon Musk, the leader of Trump’s government efficiency campaign, regularly advertises cryptocurrencies on his social media platform X.
The government views holding digital currency like Bitcoin as a hedge against inflation and an alternative store of value to gold.
Some experts say the cryptocurrency market is highly volatile and has price fluctuations, making it a risky bet for alternatives to gold.
If the US crypto reserve plans move forward, more countries will enter the game due to the US’s outsized influence as the world’s largest economy.
Trump’s support for crypto will put America ahead of the curve and enable the US to influence the global crypto rules.
The US government would be able to reduce the price volatility of cryptocurrencies if it holds a sizable portion of the global cryptocurrency market through the reserve.
Republican Senator Cynthia Lummis proposed the Bitcoin Act in Congress in July 2024. It mandated bitcoin held by the government be moved to the US Treasury and form a crypto reserve.
The bill is still in consideration.
Only three countries recognize cryptocurrency as legal money: El Salvador, Bhutan, and the Central African Republic.
The government of Nayib Bukele, president of El Salvador, was the first to accept Bitcoin as legal money in 2021. But, in a January 2024 examination, Yale researchers discovered that the currency was not frequently used. The government reduced the bitcoin laws in January, rendering it useless for paying state and tax expenses. El Salvador currently has 6,088 Bitcoin, valued at $558 million.
Bhutan decided to keep cryptocurrencies like Ethereum and Bitcoin in strategic reserves. Arkham Exchange reports that Bhutan mines have roughly 11,000 Bitcoin worth $1.1 billion.
Arkham Exchange is a decentralized marketplace that allows users to buy and sell on-chain intelligence.
Many countries hold cryptocurrencies, but seized by law enforcement due to criminal activity.
Crypto transactions are currently banned in China since the government found it difficult to regulate them. The Chinese government is planning to create its own digital money supported by the Chinese central bank. It holds 194,000 Bitcoin, worth roughly $16.2 billion (as of March 4).
Cryptocurrency company Binance reports that the UK government has 61 Bitcoins valued at $5 million seized from global money laundering networks.
Ukraine holds 1200 Bitcoin valued at $100m from public donations for the current Russian war on Ukraine.
India possesses 450 Bitcoin worth $37 million seized during investigations into cryptocurrency fraud.
