On March 2, President Donald Trump announced plans to form the United States’ first strategic cryptocurrency reserve (SCR). Trump shared the news on his social media platform Truth Social, stating that the reserve will include Bitcoin, Ethereum, XRP, Solana’s SOL and Cardano’s ADA.
Cryptocurrency prices surged following the announcement. XRP skyrocketed 33 percent, while Solana’s SOL gained 25 percent. Cardano’s ADA saw the most significant gains, soaring more than 60 percent.
Bitcoin climbed 10 percent to $94,343.82, bouncing back from a three-month low of less than $80,000 two days before the announcement. Ethereum, which struggled in 2024, rebounded 13 percent.
“A U.S. Crypto Reserve will strengthen this crucial industry after years of attacks from the Biden Administration,” Trump wrote on Truth Social. He credited his Executive Order on Digital Assets for directing a presidential working group to establish the strategic reserve, and vowed to make the U.S. “the Crypto Capital of the World.”
However, the plan raises more questions surrounding government intervention in financial markets, regulatory oversight and the potential risks of federally controlled digital assets.
How will the strategic crypto reserve work?
The specifics of how the reserve will function remain murky. It’s unclear how the move would benefit citizens or if an act of Congress is required to implement the plan.
However, some see similarities to the Strategic Petroleum Reserve, which serves as a way for the government to limit the impacts of petroleum supply disruptions.
Beyond appointing crypto-friendly officials after returning to the White House in January, the Trump administration has yet to release concrete cryptocurrency policy details.
In January, Trump assembled a working group on digital assets. His executive order tasked the group to “evaluate the potential creation and maintenance of a national digital asset stockpile” that could use “cryptocurrencies lawfully seized by the Federal Government through its law enforcement efforts”.
On Friday, March 7, Trump is set to host the first White House Crypto Summit, where investors hope to gain insight into the administration’s crypto strategy.
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How did we get here?
Trump first floated the idea of a U.S. Bitcoin stockpile at Bitcoin 2024, a major industry conference. His pitch: The government should retain all the Bitcoin it seizes rather than sell it.
Since then, the idea has gained traction among some crypto enthusiasts eager for policies that legitimize and boost Bitcoin’s value. Some see the reserve as a logical extension of the government’s existing Bitcoin holdings, which are estimated to total more than 180,000 BTC — worth approximately $18 billion — seized from cybercriminals. Usually, the government sells confiscated Bitcoin to compensate victims and fund enforcement efforts.
While Bitcoin remains the U.S. government’s most closely tracked cryptocurrency, authorities have seized other digital currencies as well.
Trump, once a crypto critic, embraced the cryptocurrency community (and its wealthy donors) during his latest campaign. Under former President Joe Biden’s administration, regulators cracked down on digital assets, citing concerns over fraud and money laundering.
Since Trump’s return, the Securities and Exchange Commission (SEC) has softened its approach and dropped investigations into several major cryptocurrency companies, including the dismissal of a lawsuit against Coinbase, the country’s largest exchange.
Criticism of the strategic crypto reserve
Trump’s announcement drew mixed reactions from the financial and crypto communities. Some worry that government ownership of cryptocurrency could lead to extensive influence over the market, regulatory overreach and even manipulation.
For example, XRP, one of the tokens named by Trump to join the SCR, is a Ripple Labs’ token. Ripple financially backed pro-crypto congressional candidates in November, according to Reuters. Further stoking fears of potential corruption, both Donald and Melania Trump recently launched their own cryptocurrencies.
Many in the crypto community believe a reserve should exclusively hold Bitcoin, arguing that it’s the oldest and more secure option. Others oppose the concept of a national reserve altogether, warning a government-backed reserve could threaten national security, hurt individual investors, diminish the dollar’s dominance or be easily dismantled by future administrations.
“The U.S. government shouldn’t be picking winners and losers in the crypto market,” says Adam Blumberg, co-founder of Interaxis, a firm that provides cryptocurrency and blockchain education for financial advisors. “It’s not what cryptocurrency was created for. It puts too much power in the hands of the federal government, which is always in a four-year (or even two-year) cycle.”
Security is another concern for Blumberg.
“Who has the keys? How is it secured?” he says. “We can stockpile gold because you store it using vaults and men with guns. Bitcoin is all electronic.”
Blumberg lays out a potential scenario where the U.S. begins buying massive amounts of Bitcoin each year, driving the price higher and higher. At the same time, other countries, like China, accumulate BTC to keep pace.
“But after a few years, China can decide to dump all their BTC — and dump the price,” says Blumberg. “It won’t have much impact on the U.S. government, since the cryptocurrency reserve would be such a small portion of our value. However, it would have a huge effect on individual investors since everyone will be buying BTC thinking there’s a Bitcoin arms race.”
He’s also critical of including tokens other than Bitcoin in the national reserve.
“The other crypto assets like ETH and SOL have different valuation structures,” he says. “It would be like the U.S. having a strategic reserve of Amazon and Microsoft stock. It doesn’t make sense.”
The 5 coins picked for Trump’s strategic cryptocurrency reserve
Here’s an overview of the five cryptocurrencies chosen for the government’s new strategic reserve. Notably, stablecoins, like USDC, are absent from the list.
Bitcoin
The original cryptocurrency, Bitcoin has been a cornerstone of the digital asset market since its launch in 2009. However, Bitcoin didn’t gain mainstream traction until about 2017. Despite volatility, it remains the most widely recognized token. In 2024, the SEC approved Bitcoin ETFs, making it easier for institutional investors to gain exposure.
Ethereum
Ethereum powers a decentralized network where users transact using ether. Its smart contract capabilities make it essential for decentralized applications, helping to cement its status as the second-largest cryptocurrency.
XRP
Developed by Ripple Labs, XRP facilitates cross-border payments and supports transactions in multiple fiat currencies. Its trustless system allows for fast and efficient international money transfers.
Solana
Solana, introduced in 2020, is known for its high-speed transactions and scalable infrastructure. The network’s native token, SOL, plays a key role in its proof-of-stake ecosystem.
Cardano
Founded by an Ethereum co-creator, Cardano operates a smart contract network built for identity management and security. Its native token, ADA, underpins the platform’s governance and staking system.
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