President Trump said on social networks Sunday, its administration is working to create a “cryptographic strategic reserve” which will include Bitcoin and Ethereum, as well as the less known Crypto-Monnaies XRP, Solana and Cardano. He then followed another article saying that his planned reserve would also include Bitcoin and Ether, the two most popular cryptocurrencies.
The announcement helped cryptographic prices rebound after recent sales, but only for a few hours. After reaching $ 90,000 on Monday morning, Bitcoin fell to $ 87,000, or 7.3%on Monday afternoon. Ethereum fell 14.6% to $ 2,153. Massive price peaks in XRP, Solana and Cardano also fell, lowering 12.1%, 13%and 12.3%respectively.
Nic Puckrin, financial analyst, investor and co-founder of the corner office, said in a note that the cause of the temporary prices increase was probably a “combination of` hopium ” with short classic pressure “, adding that more concrete information on the cryptographic reserve plan is necessary to reintegrate investors of its value.
“While the announcement of the crypto reserve was a bullish catalyst for short -term cryptography prices, its long -term impact remains questionable. On the one hand, no real detail has yet been disclosed,” said Puckrin.
That said, the creation of the digital currency reserve is a marked moment for Bitcoin and Blockchain technology.
“The launch of an American strategic reserve of Crypto marks a pivotal moment for digital assets, reflecting a major step in government engagement with cryptographic industry,” said Federico Brokate, head of the American company in 21Shares, in a note as an analyst. “This initiative reinforces not only the role of Bitcoin as a maturation value store, but also underlines the importance of blockchain networks like Ethereum, Solana, XRP and Cardano in financial infrastructure, payments and decentralized finance.”
What is an cryptographic strategic reserve?
As described in the president’s executive order From January 23, the Crypto Strategic Reserve would be a national stock of digital assets created in a federal regulatory framework developed by the newly established working group in the digital asset markets.
The working group will be chaired by senior officials, including the White House AI and the Czar Crypto, the Treasury Secretary and President of the Securities and Exchange Commission, among others.
On the campaign track, Trump promised support for a “strategic national bitcoin”, which would include bitcoin that the US government previously seized in the law enforcement actions. The announcement on Sunday was the first time he pleaded for the government to have other types of cryptocurrencies.
The way in which the crypto strategic reserve would be structured and maintained is not yet clear, because the White House has not immediately provided additional details, including the quantity of each type of cryptocurrency that Trump wants the United States to hold and how the government would acquire them.
But more information could be revealed this week, because Trump also recently announced that he would speak to industry leaders on Friday in a White House “crypto summit”.
“The first summit of White House cryptography on Friday will be crucial to watch,” said Puckrin. “We will wait to see who will be there, what will be discussed and if real steps towards the implementation are described. The key question is: how will they finance and legislate this reserve? Until we have answers, there is little substance to support this gathering, and that could go out as quickly as it started.”
What is the interest of a strategic cryptography reserve?
Similar to the strategic oil reserve, which protects the American economy Disruption of oil suppliesA national crypto reserve would help diversify government assets and cover themselves against financial risks, according to defenders of the plan.
Critics, however, say that the volatility of cryptocurrencies make it a bad choice as a reserve ratio.
Potential hedges
The creation of a Crypto strategic reserve is likely to demand an act of the congress, as in the strategic oil reserve, which was Created in December 1975 When President Gerald Ford then signed the Energy Policy and Conservation Act.
In addition, the inclusion of cryptocurrencies other than bitcoin is likely to deal with a supported decline among certain corners of the strongly divided cryptocurrency industry. Bitcoin is the oldest cryptocurrency and by far the most popular and represents more than half of the global market capitalization of cryptography.
The president presented himself as hero of the cryptographic industry, which, according to his announcement, had been the target of the “years of corrupt attacks by the Biden administration”. The cryptography industry felt unjustly targeted by Biden administration and spent heavily to help Trump win the elections.
The first weeks of his administration saw several measures to stimulate crypto, including the end or break of the large -scale implementing measures of the Securities and Exchange Commission.
The cryptography prices climbed after Trump’s victory last year, and when the Bitcoin price crossed $ 100,000 in early December, Trump took the credit and posted “You are welcome !!!” on social networks.
But prices have dropped since the inauguration of Trump and Trump has faced criticism, including allies in the cryptography industry, for helping to launch a Personal part Just before taking up its duties which has since collapsed in value.
The crash of the pieces even linked to the first lady Melania Trump and the Argentinian president Javier Milei, as well as a massive hack of a great exchange of cryptocurrency which, according to the FBI, was undertaken by North Korea, also attenuated enthusiasm for the crypto.
