Trump, here to put out the fire.
The market has been on a roller coaster ride, and last week was no exception. Under the pressure of tariffs and theft, market panic spread rapidly, and the usually strong BTC fell below $80,000, ETH came to around $2,200, and the top altcoins BNB and SOL were overwhelmed and returned to the detonation point at the end of last year.
Amid the wailing, the "savior" Trump sent another shot in the arm. Perhaps because the second stock market, the cryptocurrency market, which represents political achievements, was too depressed, it was a bit embarrassing. Trump issued a message last Sunday, once again putting the strategic reserve of cryptocurrencies on the agenda, saying that he would speed up the promotion of crypto reserves including the five major currencies. In other words, the crypto reserve is a foregone conclusion, and the market has lived up to expectations and ushered in a rapid rebound.
But making reserves is not as simple as the president just talking.
After BTC fell below $80,000 on Friday, the market sentiment dropped to the freezing point. Discussions on whether the bull market would turn into a bear market continued. Falling and volatile prices became the main theme of many currencies. The market even began to pay attention to the shutdown prices of mining machines, which shows the downturn. But Trump is the reason for his success and failure. The value of this sentence is still rising.
Just last night, the Bitcoin President of the United States, Trump, could not sit still. In a post on his own Truth Social, Trump said, "The US Crypto Reserve will elevate this critical industry and free it from years of corrupt suppression by the Biden administration. Therefore, my Executive Order on Digital Assets instructs the Presidential Working Group to advance the establishment of a Crypto Strategic Reserve, which includes XRP, SOL and ADA. I will ensure that the United States becomes the global cryptocurrency capital. We are making America great again!"
It is not the first time that crypto strategic reserves have been mentioned in the United States. Since Trump promised to establish reserves at the Bitcoin Conference last October, news about crypto reserves has never stopped. Whether it is U.S. Senator Cynthia Lummis
Whether it is the proposed purchase of 1 million BTC or the subsequent so-called crypto reserve construction framework, they are constantly adding to the United States' crypto reserve expectations.
Although the president did not list the issue as a top priority after taking office, and crypto was not among the top 100 executive orders, Trump still made a pledge of allegiance to crypto on January 24. He signed an order titled "Strengthening America's Leadership in Digital Financial Technology" to establish a presidential working group, which clearly stated that within 180 days of the date of the order, the working group should submit a final report and proposal to the president, including the development of a complete federal regulatory framework to regulate the issuance and operation of digital assets (including stablecoins) in the United States. At the same time, the possibility of establishing and maintaining a national digital asset reserve should be evaluated, and standards for establishing such reserves should be proposed. The reserves may come from cryptocurrencies legally seized by the federal government through law enforcement.
At the time, the market was not happy with the reserve, and even disappointed, because it came from legal seizures rather than incremental purchases, and there was still room for some time. With the liquidity crisis brought about by its coin issuance and subsequent policy proposals, the encrypted reserve was gradually not mentioned, and industry insiders also expressed extreme dissatisfaction with the president's harvesting money. The love of support gradually turned into hatred of money-grabbing.
But just when the market was down, the strategic reserve was mentioned again, and it was basically confirmed, which successfully stopped the market from falling. In this post, Trump rarely specified the currency, and proposed that altcoins such as SOL, ADA, and XRP would be included. But what is quite interesting is that at the beginning of the post, Trump did not even mention BTC and ETH, which made ETH holders very angry, but then he posted again to add, "Obviously, Bitcoin and Ethereum will become the core of the currency reserve."
This move has a significant boost to the market. After the news was released, BTC quickly rose from $85,000 to $95,000, with a maximum increase of more than 10%, now at $92,000. ETH also rebounded to $2,550, and the total market value of cryptocurrencies rebounded by 9% to $3.254 trillion. The reserve currencies clearly pointed out by Trump were even more impressive. ADA rose by more than 70% in 24 hours, with a market value of more than $40 billion, ranking 8th among cryptocurrencies. XRP once reached $2.99, surpassing ETH in fully diluted value, and SOL also stepped out of the shadow of large-scale unlocking and MEME and returned to above $170.
In response, Joseph Lubin, founder of Consensys and co-founder of Ethereum, praised Trump's "calling" behavior on social media, saying, "This is an epic call. President Trump is a responsive and confident leader. Thank him."
Behind the shouting orders, there are also many suspicions of insider trading. For example, on the eve of Trump’s announcement, there was a whale who went long on BTC and ETH with 50x leverage on Hyperliquid, using about $4 million in funds to leverage a total position of about $200 million. At that time, the prices of Bitcoin and Ethereum were around $85,000 and $2,210, respectively. At present, all positions in this address have been closed, and in less than 24 hours, a profit of nearly $7 million has been made. Calculated based on the initial capital of $4 million, the rate of return is 175%.
The insider information may not be true, but this statement is not groundless. After all, before this, Trump had never mentioned that other currencies besides BTC and ETH would be included in the reserves, but this time he first released the list of altcoins, and put the mainstream reserve currencies at the end, which is obviously putting the cart before the horse. Looking at the new three currencies SOL, ADA, and XRP that have entered the reserves, they are all currencies that have capital lobbying, and they are obviously suspected of "advertising space", and the transfer of interests is not groundless.
SOL is backed by Western capital, while Ripple is more experienced. It bet on both sides before the election, donating $45 million to the crypto political action committee Fairshake. After Trump was elected, it immediately showed its loyalty, donating $5 million in XRP at Trump's inauguration, and donated another $25 million to Fairshake before the US midterm elections, and has a close relationship with Trump. The entry of ADA is surprising. The currency originated from Cardano and was not valued by Trump before. However, according to CryptoDoggyCN, in early February, the founder of ADA said he would go to Florida to meet big shots. Alex Xu, research partner of Mint Ventures, also analyzed that SOL, XRP, and ADA have been running to Mar-a-Lago frequently since Trump took office.
On the other hand, the president's "choice" is really very casual, and there is even suspicion of disregarding regulations. SOL was previously declared a security by the SEC, and its attributes are not clear now. Therefore, the approval of ETF is not as fast as LTC, and Ripple is not much behind. The lawsuit with the SEC has been dragging on for nearly 5 years and has not yet ended. There is no trace of ADA's entry. If it is not a profit transfer, it can only prove that it was chosen at random from the top 9 currencies in market value. After all, the president is not a "well-informed" person in the field of encryption.
It can be seen that this call has more or less lobbying elements, and the president's top advertising position is likely to be given to the currency with the most lobbying benefits. In this regard, many industry insiders have also expressed strong dissatisfaction, believing that the president's move not only weakens the legitimacy of strategic reserves, but is also irresponsible to taxpayers and currency holders. AngelList co-founder Naval Ravikant said frankly, "American taxpayers should not take over those nominally decentralized cryptocurrencies," and Aave founder Stani Kulechov also spoke sharply, saying that the addition of XRP, SOL and ADA is ugly news.
Irony aside, the promotion of strategic reserves seems far from enough with just the president's verbal promise.
The core question is, where does the money come from? For now, there are existing reserves of Bitcoin in the United States, but if you want to establish a crypto reserve, especially a crypto reserve containing other currencies, you can't avoid the issue of fund purchase. According to the latest data from the Congressional Budget Office (CBO), the U.S. federal budget deficit will reach $1.865 trillion in fiscal year 2025, accounting for 6.2% of the gross domestic product (GDP). The huge deficit has prompted Trump to make several strange moves, either imposing tariffs or shutting down the government internally. He even announced a new plan to buy an immigration gold card for $5 million. All these measures directly reveal the problem that the landlord really has no surplus food.
In this context, whether it is for the government or for himself, Trump, who is obsessed with money, implements all current policies in the mode of "making money out of nothing". Whether it is various tosses in the field of encryption or building a virtual world, traffic monetization is Trump's ultimate goal. It is absolutely impossible for him to invest real money in encryption reserves or pull the market. It is more likely that encryption companies will offer first, and then keep reserves and extract funds from them.
BitMEX co-founder Arthur Hayes bluntly stated that this move was nothing new, saying, "Please let me know when they get approval from Congress to borrow money or raise the price of gold again. Without these, they will have no money to buy Bitcoin and altcoins." Some industry insiders also said that Trump frequently used the words "reserve" and "stockpile" interchangeably in his policy terms, and the specific implementation methods were difficult to determine.
From a practical perspective, if a strategic reserve is to be approved at the federal level, it must be approved by Congress, not by the president alone. Although the president won both houses, it was not an overwhelming advantage, especially in the House of Representatives, where he won by only 5 votes. The game between the two parties is far from over, but is becoming increasingly fierce, and the government shutdown is making a big fuss. On the other hand, the increase in the reserve composition of many currencies will inevitably increase the difficulty of approval. After all, it is obviously not realistic to use a currency that is already involved in a lawsuit as a strategic reserve, and the road to congressional approval is foreseeable to be difficult. It is worth mentioning that in the past week, the US SEC withdrew the lawsuit against Coinbase and terminated the investigation into projects such as Robinhood Crypto, OpenSea, Uniswap Labs, and Tron, but has not yet ended the lawsuit against Ripple.
If they want to bypass Congress, they can only start with the national sovereign fund, but the national sovereign fund did not mention crypto assets before. At the same time, to join the fund, Trump, a businessman who focuses on interests, must hand in more political donations, which is naturally a heavy burden for crypto companies. Perhaps this is the case. Under such a good news, although Bitcoin and Ethereum have risen rapidly, they have not broken through new highs and are only hovering around the average line.
However, whether it is the transfer of interests or the timing of the order, in the final analysis, Trump's remarks have once again revived the market. For the cryptocurrency circle that is hovering on the line between bull and bear markets, it is also a blessing in disguise.
On March 7, Trump will host the first White House Cryptocurrency Summit and deliver a speech. The summit will be hosted by David Sacks, the White House crypto chief, and managed by Bo Heins, the executive director of the task force. Will Trump surprise or shock the industry at this summit? The market is ultimately being led by Trump.
