Trump, the firefighter has arrived.
The market rollercoaster continues, and last week was no exception. Under the double pressure of tariffs and theft, the market panic quickly spread, and even the stalwart BTC fell below $80,000, ETH came close to $2,200, and the altcoin leaders BNB and SOL were also heavily burdened, returning to their year-end starting prices.
Amidst the wailing, the "savior" Trump has once again delivered a stimulant. Perhaps because the crypto market, which represents his political achievements, has been too sluggish, causing some embarrassment, Trump posted on Sunday that he will accelerate the promotion of a crypto reserve including five major cryptocurrencies. In other words, the crypto reserve is now a done deal, and the market has responded with a rapid rebound as expected.
But to establish a reserve is not as simple as the president just flapping his lips.
After BTC fell below $80,000 on Friday, the market sentiment plummeted, with discussions of a bull-to-bear market transition never ceasing, and plunging volatility becoming the main theme for many cryptocurrencies, with the market even starting to focus on the shutdown price of mining machines, indicating the depth of the slump. But it is Trump who makes or breaks the market, and this saying is becoming increasingly valuable.
Last night, the Bitcoin president Trump could no longer sit still. Trump posted on his self-created Truth Social that the "U.S. Crypto Reserve" will boost this critical industry and free it from the corruption and suppression of the Biden administration for years. Therefore, the executive order on digital assets he issued instructs the Presidential Working Group to advance the establishment of a Crypto Strategic Reserve, which will include XRP, SOL and ADA. He will ensure that the U.S. becomes the global capital of cryptocurrencies. We are making America great again!
The Crypto Strategic Reserve in the U.S. is not the first mention, as news about the crypto reserve has never stopped since Trump promised to establish a reserve at the Bitcoin conference last October. Whether it was the proposal by U.S. Senator Cynthia Lummis to purchase 1 million BTC, or the subsequent leaked framework for the crypto reserve construction, they have been constantly adding bricks to the expectation of the U.S. crypto reserve.
Although the matter was not given a very high priority after the president took office, and crypto was not among the top 100 executive orders, on January 24th, Trump still delivered his statement on crypto. He signed an order titled "Strengthening U.S. Leadership in Digital Asset Technology", which will establish a Presidential Working Group, and within 180 days of the order's issuance, the Working Group should submit a final report and proposals to the President, including developing a comprehensive federal regulatory framework to govern the issuance and operation of digital assets (including stablecoins) within the United States. It should also assess the feasibility of establishing and maintaining a national digital asset reserve, and propose standards for such a reserve, which could potentially be composed of cryptocurrencies seized by the federal government through law enforcement actions.
At the time, as the reserve was to be composed of seized cryptocurrencies rather than incremental purchases, and there was still some operational space, the market was not very receptive to it, and there was even a sense of disappointment. As the liquidity crisis caused by his coin issuance and subsequent policy proposals, the crypto reserve gradually faded from people's attention, and industry insiders expressed extreme dissatisfaction with the president's exploitative cash-grabbing, with their once-supportive love gradually turning into resentment over being robbed.
But just as the market was in the doldrums, the strategic reserve was brought up again, and in a confirmed context, it successfully halted the market's decline. In this latest post, Trump rarely specified the coins, proposing that altcoins such as SOL, ADA, and XRP would be included, but interestingly, in the initial post, he did not even mention BTC and ETH, which angered ETH holders, but later he posted again to supplement that "obviously, Bitcoin and Ethereum will be the core of this currency reserve".
This move has had a very significant boosting effect on the market. After the news was released, BTC quickly rose from $85,000 to $95,000, up more than 10% at the highest, and is currently trading at $92,000, while ETH has also rebounded to $2,550. The total crypto market cap has rebounded 9% to $3.254 trillion. The reserve coins specifically mentioned by Trump have been sensational, with ADA surging over 70% in 24 hours, with a market cap exceeding $40 billion, ranking 8th among cryptocurrencies, XRP briefly touching $2.99, fully diluted value exceeding ETH, while SOL has also emerged from the shadow of large unlocks and MEME, returning above $170.
In this regard, ConsenSys founder and Ethereum co-founder Joseph Lubin praised Trump's "shilling" behavior on social media, saying "This is an epic shill, President Trump is a quick-reacting and confident leader, thank you."
Behind the shill, there are also many doubts about insider trading. For example, on the eve of Trump's announcement, there was a whale on Hyperliquid who was long BTC and ETH with 50x leverage, using about $4 million in capital to leverage a total position of about $200 million, with Bitcoin and Ethereum prices around $85,000 and $2,210 respectively at the time, and this address has now fully closed its position, making a profit of nearly $7 million in less than 24 hours, a return of 175% based on the initial $4 million capital.
The insider information may not be true, but this is not just a figment of the imagination. After all, before this, Trump had never mentioned including coins other than BTC and ETH in the reserve, but this time he released the altcoin list first, and put the mainstream reserve currencies at the end, which is clearly putting the cart before the horse. And looking at the new three coins entering the reserve, SOL, ADA, and XRP, they are all coins with capital lobbying, obviously having the "advertising slot" smell, and the interest transfer is not unfounded.
SOL has already been endorsed by Western capital, Ripple has the advantage of being experienced, having bet on both sides before the election, donating $45 million to the crypto political action committee Fairshake, and immediately pledging loyalty after Trump's election, donating $5 million in XRP at the inauguration, and another $25 million to Fairshake before the midterm elections, with deep ties to Trump. ADA's inclusion is even more surprising, as the coin comes from Cardano, which has not been a focus for Trump before, but according to CryptoDoggyCN, the founder of ADA said in early February that he was going to meet a big shot in Florida, and Mint Ventures research partner Alex Xu also analyzed that SOL, XRP, and ADA have been visiting Mar-a-Lago very diligently since Trump took office.
On the other hand, the president's "heart-selected" coins are also quite random, even with a hint of disregard for regulations. SOL was previously clearly designated as a security by the SEC, and its attributes are still unclear, so its ETF approval is not as fast as LTC, and Ripple is no exception, with its lawsuit with the SEC dragging on for nearly 5 years and still unresolved. ADA's inclusion is also untraceable, and if it is not interest transfer, it can only prove that the president, who is not known for his "broad knowledge and strong understanding" in the crypto field, simply picked one out of the top 9 coins by market cap.
It can be seen that this shill may have an element of lobbying, and the president's top advertising slot was most likely given to the coins with the most lobbying interests. Many industry insiders have also expressed strong dissatisfaction, believing that the president's move not only undermines the legitimacy of the strategic reserve, but is also irresponsible to taxpayers and coin holders. AngelList co-founder Naval Ravikant frankly said that "American taxpayers should not be the bagholders for those nominally decentralized cryptocurrencies", and Aave founder Stani Kulechov's statement was also quite sharp, calling the inclusion of XRP, SOL and ADA as ugly news.
Satire aside, the implementation of the strategic reserve, relying solely on the president's verbal check, seems to be still far from enough.
The core issue is, where does the money come from? As of now, Bitcoin has existing reserves in the US, but to establish a crypto reserve, especially one that includes other cryptocurrencies, the issue of funding the purchases cannot be avoided. According to the latest data from the US Congressional Budget Office (CBO), the US federal budget deficit will reach $1.865 trillion in fiscal year 2025, accounting for 6.2% of GDP. The massive deficit has led Trump to come up with some unusual measures, either imposing tariffs on foreign countries or shutting down the government, and even announcing a new plan to buy immigrant golden visas for $500 million. All these measures directly reveal the problem - the landlord's house is truly out of grain.
Against this backdrop, whether for the government or for himself, Trump, who has fallen into the money trap, is implementing all his current policies in a "empty-handed wolf" mode. Whether it's the various antics in the crypto field or the construction of the virtual world, the monetization of traffic is Trump's ultimate goal. For him to put up real money to invest in crypto reserves or to prop up the market, that is absolutely impossible, and it is more likely that crypto companies will be asked to make an offering first, and then maintain reserves, from which funds will be extracted.
BitMEX co-founder Arthur Hayes bluntly stated that this move is nothing new, saying "Tell me when they get congressional approval to borrow or raise the price of gold. Without that, they have no money to buy Bitcoin and Altcoins." Industry insiders also said that Trump frequently alternates the use of "reserve" and "stockpile" in his policy language, and the specific implementation method is difficult to determine.
From a practical standpoint, if federal-level strategic reserves are to be established, it must go through congressional approval, not just the president's say-so. Although the president has a majority in both houses, it is not an overwhelming advantage, especially in the House of Representatives, where he won by a narrow margin of 5 votes. The game between the two parties is far from over and is becoming increasingly intense, with the government even shutting down in a big way. On the other hand, the addition of many cryptocurrencies to the reserve composition is bound to increase the difficulty of approval, after all, the currencies already embroiled in lawsuits as strategic reserves are obviously not very realistic, and the path of congressional approval is foreseeable to be difficult.
It is worth mentioning that in the past week, the US SEC has withdrawn its lawsuit against Coinbase and terminated its investigations into Robinhood Crypto, OpenSea, Uniswap Labs, TRON and other projects, but has not yet ended the lawsuit against Ripple.
If you want to bypass Congress, you can only turn to the sovereign wealth fund, but the sovereign wealth fund has not mentioned crypto assets before, and for Trump, a businessman-president who is focused on interests, he must pay more political donations to join the fund, which is naturally a heavy burden for crypto companies. Perhaps that is why, despite the great news, Bitcoin and Ethereum have risen rapidly but have not broken new highs, only hovering around the average line.
However, whether it is the transfer of interests or the timely shilling, at the end of the day, Trump's latest remarks have once again revived the market, which is a godsend for the crypto circle that has been hovering on the bull-bear dividing line.
On March 7, Trump will host the first White House Crypto Summit and deliver a speech. The summit will be hosted by White House Crypto Czar David Sachs and managed by Executive Director of the Working Group Bo Hines. Will this summit bring surprises or shocks to the industry? The market's nose is ultimately being led by Trump.
