Trump's Announcement Sparks Brief Crypto Price Surge
President Donald Trump's surprise announcement that the US government is planning to purchase and hold a variety of digital assets in a strategic reserve fund sent cryptocurrency prices on a short-lived surge. The announcement highlights Trump's growing attempts to use volatile cryptocurrency prices as a barometer of his public support.
Trump revealed his plans for the "Crypto Strategic Reserve" on social media Sunday, stating that it would include lesser-known cryptocurrencies such as XRP, Solana, and Cardano. He later followed up with another post saying that his planned reserve would also include Bitcoin and Ether, the two most popular cryptocurrencies.
The announcement helped crypto prices enjoy a brief rebound after recent sell-offs. Bitcoin surged to around $95,000 after dipping below $80,000 last week. XRP, Solana, and Cardano saw massive spikes in their prices following Trump's announcement on Sunday. However, by Monday afternoon, prices had fallen roughly back to where they were before Trump's announcement.
US stocks also fell sharply on Monday as Trump confirmed plans to impose 25% tariffs on imports from Canada and Mexico. Advocates for the government holding a crypto reserve say it would help diversify government holdings and hedge against financial risks. Critics, however, argue that the volatility of cryptocurrencies makes them a poor choice as a reserve asset.
The Evolution of Trump's Crypto Stance
The inclusion of cryptocurrencies other than Bitcoin is likely to face sustained pushback among some corners of the heavily divided cryptocurrency industry. Bitcoin is the oldest and most popular cryptocurrency, accounting for more than half of the world's global crypto market cap. Some of Trump's major allies in the industry expressed surprise and skepticism about Trump's plan.
"Just bitcoin would probably be the best option – simplest, and clear story as successor to gold," said Brian Armstrong, the CEO of Coinbase. The White House did not immediately provide additional details on how much of each type of cryptocurrency Trump wanted the US to hold, or how the government would acquire them, and whether he favored including other types of cryptocurrencies as well.
Reactions from the Crypto Industry
The president has cast himself as hero to the crypto industry, which he said in his announcement had been the target of "years of corrupt attacks by the Biden administration." The crypto industry felt unfairly targeted by the Biden administration and spent heavily to help Trump win election.
The first several weeks of his administration have seen several moves to boost crypto, including ending or pausing high-profile enforcement actions by the Securities and Exchange Commission. Crypto prices soared after Trump's victory last year, and when the price of Bitcoin first crossed $100,000 in early December, Trump took credit and posted "YOU'RE WELCOME!!!" on social media.
However, prices have fallen since Trump's inauguration and Trump has faced criticism, including from allies within the crypto industry, for helping launch a personal meme coin just before he took office that has since collapsed in value. The crash of meme coins linked to First Lady Melania Trump and Argentine President Javier Milei, along with a massive hack of a major cryptocurrency exchange attributed to North Korea, have also dimmed enthusiasm for crypto.
"Why is crypto in the toilet if Trump is crypto king?" Dave Portnoy, an influencer and crypto enthusiast, said on social media last week. In addition to his announcement Sunday, Trump has also recently announced he will speak at and host industry leaders on Friday at a White House "Crypto Summit."