President Donald Trump’s declaration of a US Strategic Crypto Reserve over the weekend shook business and political circles. Supporters regard it as a daring step to turn America into the “Crypto Capital of the World,” as Trump promised, while detractors warn of possible conflicts of interest, particularly with David Sacks, Trump’s recently designated AI and crypto czar.

Trump stated that the reserve will purchase popular digital assets such as Bitcoin (BTC) and Ethereum (ETH), as well as lesser-known tokens like XRP, Solana (SOL), and Cardano (ADA).

In January, Trump authorized a Presidential Working Group on Digital Assets to investigate the formation of a national cryptocurrency stockpile, in sharp contrast to the previous administration’s regulatory crackdowns.

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Crypto Strategic Reserve Law

On March 2, President Donald Trump announced intentions to establish the US’s first strategic cryptocurrency reserve (SCR). Trump announced the plan on his social media network Truth Social, adding that the reserve will comprise Bitcoin, Ethereum, XRP, Solana’s SOL, and Cardano’s ADA.

(EMBED) https://x.com/trump_repost/status/1896247384923050059 

Cryptocurrency values soared following the news breaking. XRP surged 33%, while Solana’s SOL increased 25%. Cardano’s ADA had the greatest gains, rising more than 60%.

Bitcoin rose 10% to $94,343.82, recovering from a three-month low of less than $80,000 two days before the news. Ethereum, which suffered in 2024, has returned 13%.

“A U.S. Crypto Reserve will strengthen this crucial industry after years of attacks from the Biden Administration,” Trump said on Truth Social. He attributed his Executive Order on Digital Assets for instructing a presidential working committee to create the strategic reserve and pledged to make the United States “the Crypto Capital of the World.”

However, the concept raises further concerns about government engagement in financial markets, regulatory monitoring, and the possible perils of federally owned digital assets.

A Controversial Mix of Assets

The inclusion of XRP, Solana, and Cardano sparked concerns while analysts expected Bitcoin and Ethereum.

Some observers wonder whether the government should keep volatile cryptocurrencies, particularly ADA, which has struggled with acceptance and network activity.

Others believe lobbying played a part in crafting the list.

Bitcoin maximalists never pleased either. Many questioned why the administration chose a multi-asset reserve over a Bitcoin-exclusive plan, which the President had previously supported.

Throughout his campaign, Trump regularly raised the concept of a Bitcoin reserve. The plan gathered steam among politicians, prompting more than 25 US states to create their own Bitcoin reserves.

However, with this most recent suggestion, the President appears to be pursuing a wider approach—one that not all market participants support. 

What is a Crypto-Strategic Reserve?

As detailed in the president’s executive order of January 23, the crypto strategic reserve would be a national stockpile of digital assets built within a federal regulatory framework designed by the newly formed Presidential Working Group on Digital Asset Markets.

The working group will be led by high-ranking officials such as the White House AI and cryptoczar, the Secretary of the Treasury, and the Chairman of the Securities and Exchange Commission, among others.

On the campaign trail, Trump offered support for a “strategic national Bitcoin” stockpile, which would contain bitcoin that the US government has previously confiscated in law enforcement activities. On Sunday, he declared for the government to own different types of cryptocurrency for the first time.

How will the Strategic Crypto Reserve Work?

The mechanics of how the reserve will operate remain unclear. It is unclear how the change would benefit individuals or whether an act of Congress is necessary to put the proposal into action.

Some perceive similarities with the Strategic Petroleum Reserve, which allows the government to mitigate the effects of petroleum supply shortages.

Aside from selecting crypto-friendly individuals after returning to the White House in January, the Trump administration has yet to provide specific cryptocurrency policy information.

In January, Trump formed a working committee on digital assets. His executive order directed the panel to “evaluate the potential creation and maintenance of a national digital asset stockpile” that might include “cryptocurrencies lawfully seized by the Federal Government through its law enforcement efforts.”.

On Friday, March 7, Trump will hold the inaugural White House Crypto Summit, where investors seek to obtain insight into the administration’s crypto strategy.

Also read: Utah Could Become First State to Pass Bitcoin Reserve Bill

What’s the Purpose of a Strategic Cryptocurrency Reserve?

A national cryptocurrency reserve, like the Strategic Petroleum Reserve, would help diversify government assets and buffer against financial risks, according to proponents of the proposal.

Critics argue that cryptocurrencies’ volatility makes them an unsuitable reserve asset.

Challenges to Consider Crypto Strategic Reserve

Creating a crypto strategic reserve will most likely need congressional legislation, similar to how the Strategic Petroleum Reserve was established in December 1975 when then-President Gerald Ford signed the Energy Policy and Conservation legislation.

Furthermore, some segments of the sharply divided cryptocurrency market are expected to strongly oppose the inclusion of cryptocurrencies other than bitcoin. Bitcoin ETF is the oldest and most popular cryptocurrency, accounting for more than half of the worldwide crypto market capitalization.

The president has portrayed himself as a hero to the cryptocurrency business, which he claimed in his statement had been the focus of “years of corrupt attacks by the Biden administration.” The cryptocurrency business felt unfairly persecuted by the Biden administration, so it placed significantly to help Trump win the election.

In the first few weeks of his admin, officials made several efforts to encourage cryptocurrency, including suspending high-profile Securities and Exchange Commission enforcement cases.

Following Trump’s election last year, cryptocurrency values skyrocketed, and when the price of bitcoin first exceeded $100,000 in early December, Trump took credit and wrote “YOU’RE WELCOME!!!” on social media.

However, prices have declined since Trump’s inauguration, and Trump has drawn criticism, notably from crypto industry friends, for assisting with the establishment of a personal meme currency shortly before he entered office, which has subsequently collapsed in value.

The fall of meme coins tied to First Lady Melania Trump and Argentine President Javier Milei, as well as a big breach of a major cryptocurrency exchange that the FBI believes was carried out by North Korea, have all dampened excitement for cryptocurrencies.

Closing Thoughts

Trump’s announcement of the Crypto Strategic Reserve represents a significant and contentious shift in US digital asset policy. While the program seeks to strengthen America’s status as a crypto leader, it raises serious concerns about regulatory control, asset volatility, and government meddling in decentralized markets. 

Supporters see this as a long-overdue embrace of digital assets, while detractors caution about the risks associated with federal cryptocurrency ownership. As the administration prepares for the inaugural White House Crypto Summit, the following months will determine if this policy promotes the crypto economy or creates new hurdles for the market and investors.

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Disclaimer: The information provided in this content is for informational purposes only and should not be considered financial, investment, or legal advice. Cryptocurrency investments carry inherent risks, and readers should conduct their own research before making any financial decisions. The views and statements mentioned in the article are based on publicly available information and do not constitute an endorsement of any kind.