President Donald Trump has made a dramatic U-turn over a ‘critical industry’ he once described as ‘a scam’.
On social media on Sunday he announced the names of five cryptocurrencies he expects to include in a new US strategic reserve of cryptocurrencies on Sunday, spiking the market value of each.
The announcement marks a complete reversal in Trump’s thinking on the industry which he shared his frustration in 2021 by describing Bitcoin as a “scam” affecting the value of the US dollar.
‘Bitcoin, it just seems like a scam,’ Trump said in June of that year. ‘I don’t like it because it’s another currency competing against the dollar’ while adding that he wanted the dollar to be ‘the currency of the world.’
But on Sunday, Trump said in a post to Truth Social that his January executive order on digital assets would now create a stockpile of currencies including bitcoin, ether, XRP, solana and cardano. The names had not previously been announced.
More than an hour later, Trump added: ‘And, obviously, BTC and ETH, as other valuable Cryptocurrencies, will be at the heart of the Reserve.’
The mere mention of a federal-backed crypto reserve sent the crypto market surging about 10% adding $329 billion to crypto’s market capitalization within hours.
Bitcoin, the world’s largest cryptocurrency by market value, was up more than 9% at $92,700 on Sunday night.
Donald Trump on social media announced the names of five digital assets he expects to include in a new US strategic reserve of cryptocurrencies on Sunday, spiking the market value of each
The US already holds $17 billion worth of bitcoin. All of these assets were seized from criminal enterprises
Ether, the second-largest cryptocurrency, was up about 9% at $2,400.
‘This move signals a shift toward active participation in the crypto economy by the U.S. government,’ said Federico Brokate, head of U.S. business at 21Shares, a digital assets investment management firm.
‘It has the potential to accelerate institutional adoption, provide greater regulatory clarity, and strengthen the US’s leadership in digital asset innovation.’
James Butterfill, head of research at asset manager CoinShares, said he was surprised to see digital assets other than bitcoin included in the reserve.
‘Unlike bitcoin…these assets are more akin to tech investments,’ Butterfill said.
‘The announcement suggests a more patriotic stance toward the broader crypto technology space, with little regard for the fundamental qualities of these assets.’
Trump’s announcement is more than just another policy shift and in fact a complete reversal of the federal government’s stance on digital assets.
For years, regulators targeted crypto with lawsuits, tax crackdowns, and harsh oversight, but now under Trump, it appears the US will actively hold and manage a digital asset reserve – something that had previously been described as a ‘stockpile’.
Trump said in a post on Truth Social that his January executive order on digital assets would create a stockpile of currencies
The mere mention of a federal-backed crypto reserve sent the crypto market surging about 10% adding $329 billion to crypto’s market capitalization within hours
The US already holds $17 billion worth of bitcoin, according to research firm Arkham Intelligence. All of these assets were seized from criminal enterprises.
Trump won support from the crypto industry in his 2024 election bid, and he has quickly moved to back their policy priorities.
He is hosting the first White House Crypto Summit on Friday, and his family has also launched its own coins.
Under his Democratic predecessor, Joe Biden, regulators cracked down on the industry in a bid to protect Americans from fraud and money laundering.
Under Trump, the Securities and Exchange Commission has withdrawn investigations into several crypto companies and dropped a lawsuit against Coinbase, the largest crypto exchange in the U.S.
But in recent weeks cryptocurrency prices are down sharply, with some of the biggest digital currencies erasing nearly all of the gains made after Trump’s election win triggered a wave of excitement across the industry.
Analysts say the market needs a reason to move higher, such as signs that the U.S. Federal Reserve plans to cut interest rates or a clear pro-crypto regulatory framework from the Trump administration.
Geoff Kendrick, an analyst at Standard Chartered, is targeting bitcoin to hit $500,000, against a record high of $109,071, before Trump leaves office.
The Trump family have also launched their own coins
Trump is hosting the first White House Crypto Summit on Friday
Dogecoin, which has been promoted by Trump ally Elon Musk, is among a number of currencies which also rose sharply on Sunday
Regulatory filings in the US showed that while hedge funds remain the dominant crypto buyers, banks and sovereign wealth funds are buying too.
Quarterly filings showed that asset managers boosted allocations to US ETFs tied to the price of spot bitcoin in the fourth quarter of 2024.
Analysts and legal experts are divided on whether an act of Congress will be necessary to set up the reserve.
Some have argued the reserve could be created via the US Treasury’s Exchange Stabilization Fund, which can be used to purchase or sell foreign currencies.
Trump’s crypto group had planned to look at potentially creating the stockpile with cryptocurrencies seized in law enforcement actions.
The Crypto Strategic Reserve remains in its early stages with a Presidential Working Group tasked with its development but the market response suggests that investors already believe it’s a done deal.
