The month of March has been an eventful start for the cryptocurrency community. On March 2, U.S. President Donald Trump signed an Executive Order proposing a strategic crypto reserve that included prominent cryptocurrencies like Bitcoin, Ethereum, Solana, XRP, and Cardano. The announcement triggered a massive price rise, wherein Bitcoin shot to $92K from $79K and Ethereum reached 2,442. Additionally, several altcoins soared and the market witnessed an impressive spike. Based on these developments, it is evident that a crypto reserve plays a pivotal role in the cryptocurrency sector.
What is a strategic crypto reserve?
In simple terms, a crypto reserve is a storage of digital assets. The strategic crypto reserve initiated by Trump is a stockpile of cryptocurrencies that will be controlled by the U.S. government and used during a financial crisis. The community gained more importance after Trump approved the sector in his second electoral campaign. Notably, during his first tenure as President, Trump had been against the community.
Meanwhile, economist Peter Schiff accused Trump of manipulating the crypto market with the development of crypto reserves. Schiff pointed out that the tokens had surged following the announcement of the crypto reserve but later faced severe dips. He further stated that if the President is manipulating stocks via the reserve, he could be impeached. Also, Schiff draws attention to the X posts of Eric Trump, suggesting market manipulation by the Trump family. Notably, Eric Trump had posted cryptic messages related to Bitcoin and Ethereum, when the assets were facing a dip.
Implementing Crypto Reserve for Bitcoin
With Bitcoin gaining prominence after the announcement of the crypto reserve, Trump signed an EO on March 7, initiating a strategic Bitcoin reserve and a Digital Asset stockpile. While 200K BTC seized from criminal and civil cases would be used to create the Bitcoin reserve, the stockpile will be created under the Treasury Department and will not acquire additional assets apart from those obtained beyond forfeiture proceedings. Further, the government stated that it would not sell any Bitcoin deposited in the Reserve but maintain them as a store of value.
Before the creation of the Bitcoin Reserve, there was a heated argument in the crypto sector regarding the prominence of XRP. The XRP community stated that the asset was equal to Bitcoin and emphasized that the crypto reserve should be created with XRP as its lead. Ripple’s political efforts have drawn opposition from BTC advocates, who claim it undermines efforts for a U.S. Bitcoin Reserve. As Ripple navigated these allegations, the future of a crypto reserve was getting more complicated. Meanwhile, the lawsuit of Ripple-SEC gained prominence wherein it was speculated that the case would be closed soon.
Global Adoption
Despite Bitcoin being considered the king of crypto, several countries are still hesitant to set up a strategic Bitcoin reserve. Montana rejected the bill with a 42-58 vote, following concerns over risk, oversight, and the use of taxpayer funds for cryptocurrency investments. Meanwhile, the National Bank of Poland rejected Bitcoin as a reserve asset citing that the asset did not meet the security requirements. On the contrary, the Czech National Bank is planning to hold the asset in its reserves as part of its diversification plan.
Related: Metaplanet, El Salvador Increase Their Bitcoin Reserves
On the other hand, Florida and Oklahoma have proposed to use Bitcoin in their state treasury to safeguard their funds from inflation. If approved, the bill will allow the tax payments via Bitcoin and funds would be maintained under strict security. Apart from the duo, several states like Arizona, Texas, and New Hampshire introduced legislation to incorporate Bitcoin into their financial strategies. Meanwhile, the Utah Senator passed the Bitcoin bill, excluding a key provision, wherein it authorized the state Treasurer to invest in BTC. With this exclusion, the bill was passed on a 52-19 vote and was sent to the Governor for final approval. If signed, it would be effective from May and the bill would provide Utah citizens with basic custody protections that include mining and staking rights.
Trump’s Crypto Movements
Apart from setting up a reserve for Bitcoin and other cryptocurrencies, Trump’s crypto project, World Liberty Financial (WLFI) launched a strategic token reserve, Macro Strategy, to boost digital assets. The project would engage with financial institutions to add tokenized assets to its growing portfolio, reinforcing its commitment to bridging traditional finance with blockchain technology.
Related: Trump Admin Wants U.S. to Hold as Much Bitcoin as Possible
The World Liberty Financial project was launched by President Donald Trump and his son Eric Trump in October 2024. Although the project’s roadmap was skeptical, it was initiated to be a fundraising channel among the crypto community to boost Trump in his second Presidential run. With this initiative, it was evident that Trump was willing to extend his support to the crypto sector, which he omitted in his first tenure.
To Wrap Up
The creation of a crypto reserve has done more benefits than harm. While Trump took time to understand its potential, several countries have already started to implement the Bitcoin reserve as part of their strategy. Although some countries are yet to embrace Bitcoin, the future price trajectory of the asset and its ability to act as a hedge during inflation will soon make it possible.
