USDTrump’s Crypto Reserve Triggers Market Surge and Industry Debate
Bitcoin Tops $95K as Strategic Crypto Reserve Sparks Divisions
President Donald Trump’s announcement of a U.S. Strategic Crypto Reserve on March 2 sent shockwaves through the market, igniting a 7% jump in the global crypto market cap to $3.04 trillion.
The reserve, set to include Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA), propelled Bitcoin past $95,000 with a 7.7% gain, while Ethereum surged above $2,400, rising 10%. Altcoins saw an even sharper rally, with XRP spiking 27%, Solana jumping 25%, and Cardano soaring 60% before retreating from a peak of $1.17 to $0.94.
Analysts warned that the proposal, which requires Congressional approval, could lead to short-term volatility as investors assess its feasibility and impact.
The announcement exposed a deep divide within the industry, with Bitcoin maximalists arguing that the reserve should hold only BTC, dismissing the inclusion of XRP, SOL, and ADA as a product of lobbying efforts. Bitcoin podcaster Peter McCormack labeled the multi-asset selection as “incompetence,” while Coinbase CEO Brian Armstrong and Bitwise CEO Hunter Horsley echoed the sentiment, asserting that Bitcoin alone should serve as the nation’s digital reserve asset.
Economist Peter Schiff, a longtime Bitcoin skeptic, admitted that a BTC reserve “makes sense” but blasted the addition of altcoins, questioning their long-term value.
Others, including Anthony Pompliano and Samson Mow, ridiculed the plan, calling it a misstep that diluted Bitcoin’s role as digital gold.
On the other side, multi-chain advocates praised the move as a recognition of crypto’s evolving landscape. Ripple CEO Brad Garlinghouse dismissed maximalism as a roadblock to progress, arguing that a diversified reserve reflects the market’s reality.
Cardano founder Charles Hoskinson defended ADA’s inclusion, citing its decade-long development and focus on security. CryptoQuant CEO Ki Young Ju speculated that XRP, SOL, and ADA were prioritized over BTC and ETH due to pre-arranged deals, suggesting that Trump’s administration had deeper ties to these projects.
Meanwhile, Euler Labs co-founder Michael Bentley mocked the asset selection, likening it to a retail investor’s 2017 altcoin portfolio, fueling concerns that taxpayers were merely propping up early holders of XRP and ADA.
Political and financial conflicts of interest surfaced as industry insiders scrutinized the selection process. White House Crypto Czar David Sacks, a known investor in Solana and XRP through Multicoin Capital, played a key role in shaping the reserve. His ties to Bitwise, whose index fund mirrors the reserve’s asset composition, raised allegations of self-dealing, particularly after he reportedly liquidated holdings ahead of the announcement.
Trump’s personal investments via World Liberty Financial further fueled speculation of insider influence. Former BitMEX CEO Arthur Hayes dismissed the move as “empty rhetoric,” questioning how the U.S. would fund such purchases without reallocating gold reserves or issuing new Treasury debt.
Legal challenges add another layer of uncertainty, as experts debate whether the Federal Reserve or Treasury has the authority to buy digital assets without Congressional approval.
Proposed funding mechanisms include reallocating gold reserves, expanding the Fed’s balance sheet, or issuing new Treasury debt, though TD Cowen analysts called the plan “uncoordinated and lacking clear funding details.” They stressed that Bitcoin remains the only asset with a credible case for national reserves, warning that including altcoins invites speculation about undue lobbying influence.
Bitwise’s Head of Alpha Strategies, Jeff Park, reinforced these concerns, arguing that a multi-asset reserve undermines trust by introducing assets with questionable strategic value.
Despite mounting skepticism, Trump’s announcement fueled bullish sentiment across the market. Standard Chartered analyst Geoffrey Kendrick compared it to a “Trump put” for crypto, akin to the Federal Reserve’s role in stabilizing equity markets. He reiterated his $500,000 Bitcoin price target, citing the likelihood of other nations following the U.S. in accumulating BTC. Traders have now moved from selling rallies to buying dips, expecting heightened government involvement to sustain market momentum.
Attention now turns to the White House Crypto Summit on March 7, where officials will outline the reserve’s structure and address lingering concerns. The Presidential Working Group on Digital Assets faces a 180-day deadline to produce a report on regulatory considerations, including stablecoin oversight and legal frameworks for sovereign crypto reserves.
It happened as China was reportedly accelerating efforts to establish a strategic Bitcoin reserve as part of its de-dollarization strategy amidst changing U.S. crypto regulations. David Bailey, CEO of BTC Inc., suggested that Beijing is conducting closed-door meetings on this initiative. Despite China’s ban on domestic crypto trading since 2021, a reserve could reduce reliance on the U.S. dollar and offer a decentralized store of value.
Notably, China previously sold 194,000 BTC seized from the PlusToken scam. Currently, the U.S. leads in Bitcoin holdings with over 198,000 BTC valued around $18 billion, while state-level adoption efforts continue.
This article has been refined and enhanced by ChatGPT.
