Trump's Crypto Reserve: Citi Sees U.S. Government Buying XRP, SOL, ADA

The U.S. government's potential involvement in the cryptocurrency market has gained traction following President Trump's recent announcement. In a research report, Wall Street bank Citi (C) suggested that a U.S. crypto strategic reserve is more likely, given the President's inclusion of XRP, solana (SOL), cardano (ADA), bitcoin (BTC), and ether (ETH) in the reserve.

Citi analyst Alex Saunders noted that the U.S. government currently holds around $19 billion in cryptocurrencies, predominantly in bitcoin, compared to $750 billion in gold. The bank highlighted that the government's holdings from seizures are mainly in bitcoin, indicating that the accumulation of other digital assets would likely be funded through open-market purchases.

However, Citi pointed out that the selection criteria for the tokens to be included in the reserve are not yet clear. Pre-announcing such investments can potentially move prices against the investor, as seen with the U.K. government's gold purchases in the late 1990s. Additional clarity on the selection criteria would provide more support for the initiative.

In a separate report last month, broker Bernstein suggested that the Federal Reserve could issue debt or sell some of its gold reserves to fund cryptocurrency purchases. This proposal aligns with the potential establishment of a U.S. crypto strategic reserve, further indicating the growing interest in digital assets among government entities.