History in the Making: The Establishment of the First US Crypto Reserve

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One would have expected the news of an incoming cryptocurrency reserve to spark a bit of a frenzy in the industry since this is something that many crypto supporters have been waiting for a long time and would mark a major milestone in the development of this asset class.

Indeed, the announcement posted by President Trump on Truth Social on March 2 and saying he was going to make good on his promise and move forward with the plan to establish a crypto reserve that would comprise five assets for starters, caused the prices of the designated tokens to rise, but only briefly.

Cardano (ADA) surged by 70%, while Ripple (XRP) and Solana (SOL) increased by 30% and 20%, respectively, following the President’s declaration.

Despite not being included in the initial post, Bitcoin and Ethereum were mentioned in a later statement regarding the reserve and also experienced some gains. The Bitcoin price rose by 11%, while Ethereum jumped 13% in value.

However, when the initial wave of enthusiasm died down, it left behind an overwhelming sense of scepticism and more questions than answers.

A timeline of crypto reserve-related developments Creating a strategic reserve of any kind is not something that happens overnight.

The process is often complex and lengthy, requiring approvals from government bodies, solid infrastructures,
and regulatory frameworks surrounding the management of assets. However, with the strategic crypto reserve, things evolved surprisingly fast.

Here’s a chronological recap of what has happened so far.

• The possibility of creating a national cryptocurrency reserve was first brought into discussion during Donald Trump’s 2024 presidential campaign. On July 27, Trump gave a keynote speech at the Bitcoin 2024 Conference in Nashville, Tennessee, where he made a pledge that he would create a "Strategic National Bitcoin stockpile" if reelected. A few months later, Trump defeated his Democrat rival, Kamala Harris, becoming the 47 th president of the United States.
• Standing true to his shock and awe tenet, Trump jumped right into action following his inauguration in January, enacting various policy changes and implementing a series of decisions that caused quite a stir on the political and social scene. One such decision was the signing of an Executive Order (EO) on January 23, titled “Strengthening American Leadership in Digital Financial Technology”. As the name implies, the document includes several provisions that aim to establish the US as a frontrunner in digital finance. The order also mentioned the possibility of creating a national digital asset stockpile.
• On March 2, President Trump took to Truth Social to reveal that the Presidential Working Group on Digital Asset Markets formed through Executive Order 14178 was moving forward with the creation of a strategic crypto reserve that would include Ripple (XRP), Solana (SOL), and Cardano (ADA). A couple of hours after the announcement, Trump posted a new message, clarifying that the reserve will also hold the two leading cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH).
• On March 6, Trump signed a new Executive Order establishing a Strategic Bitcoin
  Reserve that will be comprised of Bitcoin-only assets and a U.S. Digital Asset Stockpile dedicated to storing altcoins such as Ether, XRP, Solana, and Cardano.

The White House crypto czar, David Sacks, explained in a post on social media platform X that no taxpayer money will be involved in the funding of the reserve as the assets will be sourced entirely from criminal and civil forfeiture proceedings.

The crypto holdings will be treated as a store of value and kept in the reserve long-term, with no plans of selling.

Reception and controversies

Based on recent events, it seems like the Trump administration is as crypto-friendly as could be, and market players are finally getting all of the things they wanted but were out of reach until not so long ago.

New figures have been appointed in key administrative positions in charge of overseeing activities in the crypto market. This guarantees a more tolerant approach to crypto regulations from here on and the potential withdrawal of crypto lawsuits against major crypto firms.

And now, the emergence of a strategic crypto reserve comes as a confirmation of crypto’s growing influence in the financial space.

All these measures align with Trump’s bold vision of transforming the U.S. into the crypto capital of the world, although just four years ago, the Republican leader was vehemently against crypto assets, calling Bitcoin a scam.

But this change of heart, which some might interpret as a lack of consistency from the President-elect, is not the only thing that concerns industry insiders.

Prominent crypto leaders expressed negative feelings around the idea of creating a Digital Asset Stockpile for lesser-known cryptocurrencies like Solana and XRP.

They believe that associating Bitcoin with other digital assets could tarnish its reputation and argue that the President and his advisors don’t fully understand the value proposition of Bitcoin.

Others blatantly oppose the decision and question the necessity of creating such a reserve.

Establishing strategic reserves is a practice that the United States is familiar with, as they have employed it numerous times in the past with the purpose of safeguarding the national economy against unforeseen risks that could lead to supply disruptions.

Some of the most important strategic reserves that the US holds include assets like petroleum, essential materials for defence needs, gold, and medical supplies.

Other countries also adopt this strategy, maintaining strategic reserves of national assets for diversification and risk management purposes.

Canada, for instance, has a maple syrup reserve.

However, a crypto reserve is a first for the US, and it’s still not clear how things will work out in practice. There are many aspects that haven’t yet been discussed, such as how the management team will maximise the value of these holdings and how the reserves will benefit taxpayers.

Regardless of how things will unfold further, the recent events highlight the remarkable evolution of the crypto industry.

The fact that these issues are discussed at the White House provides a clear indication that digital currencies have become an integral part of the modern economy and will likely play a key role in its future development.