Trump announces plans for a crypto strategic reserve

Is crypto about to enter a new bull market?

Alex Speedie

March 4, 2025

Following a period of decline since the U.S. election results, during which Bitcoin (BTC) fell from a post-election high of $105,000 to $85,000, cryptocurrency markets experienced a sharp rebound. This resurgence was fuelled by former President Donald Trump’s announcement of a U.S. cryptocurrency strategic reserve. The initiative, which designated five key digital assets - Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA), catalysed a significant surge in valuations across the sector.

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Cardano emerged as the standout performer, with its price soaring from $0.6468 to $1.06 within 24 hours, reflecting a remarkable gain of over 60%. Bitcoin and Ethereum also posted substantial increases, each rising by more than 10%. This rally follows Bitcoin’s 17.5% decline in February, marking its most significant monthly drop since June 2022.

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Beyond the primary market reaction, secondary market impacts were also evident. Cardano’s native token, ADA, surged 71% to $1.15 per token on Sunday, while XRP, the digital asset associated with payments firm Ripple, climbed 37% to $3.

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The establishment of a national cryptocurrency reserve signals a pivotal moment in the integration of blockchain technology and digital assets into the broader economic framework. The selection of the five highlighted cryptocurrencies warrants closer examination:

Bitcoin (BTC): As the first and most widely recognised cryptocurrency, Bitcoin is often considered a digital safe-haven asset, akin to gold.
Ethereum (ETH): The Ethereum blockchain underpins a significant portion of the decentralised finance (DeFi) ecosystem. With its smart contract functionality, Ethereum enables a range of decentralised applications (dApps) across finance, real estate, and other industries.
XRP: Designed for fast and cost-effective cross-border transactions, XRP has gained traction among financial institutions as an alternative to traditional remittance systems.
Solana (SOL): Solana’s unique "Proof of History" consensus mechanism facilitates exceptionally fast transaction speeds with low fees. Its scalability makes it a suitable candidate for handling high transaction volumes with minimal congestion.
Cardano (ADA): Distinguished by its peer-reviewed research approach, Cardano aims to deliver a scalable and sustainable blockchain ecosystem with applications spanning identity management, finance, and governance.

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While short-term market volatility may attract investor attention, the long-term implications of this initiative are far more significant. If the U.S. government proceeds with incorporating digital assets into its economic strategy, institutional adoption could accelerate, potentially driving mainstream acceptance of cryptocurrencies globally.

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Key Developments to Watch:

White House Cryptocurrency Summit: The White House is set to host its first cryptocurrency summit on Friday. Investors will closely monitor announcements regarding the official launch of the strategic reserve. Key questions remain regarding reserve management, asset utilisation, and the potential inclusion of additional cryptocurrencies.

Legislative Proposals: Various state and federal legislative initiatives are under consideration including a Republican-backed Senate bill that seeks to direct the U.S. Treasury to purchase one million Bitcoin ($95 billion at current prices).

Funding Mechanisms: The reserve could be established through the U.S. Treasury’s Exchange Stabilisation Fund, which allows the purchase or sale of foreign currencies without requiring congressional approval.

Asset Seizures: The reserve may also benefit from cryptocurrency holdings seized in law enforcement actions, including assets confiscated from criminal organisations.

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For individual investors and businesses, government-backed legitimacy could drive mass adoption of cryptocurrencies, hence some analysts predict that Bitcoin could reach $500,000 by the time Trump leaves office.

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However, critical questions remain regarding corporate governance and regulatory implications. Increased regulation will likely follow, which could provide security and legitimacy while simultaneously introducing restrictions that affect trading, taxation, and the broader crypto economy which could temporarily depress valuations as illicit actors shift holdings to alternative asset classes.

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In the coming months, risk and compliance professionals will need to adapt to these changes, and for the UK, the question will be to what extent they intend to follow suit. Watch this space.

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With that, the world of fintech is constantly changing, so to keep up to date on the most recent trends, register for our newsletter to make sure you are briefed on what you need to know, right now.

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Trump announces plans for a crypto strategic reserve

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