Trump's Crypto Reserve Proposal Sparks 20% Surge in XRP, SOL, ADA

Former U.S. President Donald Trump's announcement of a proposed U.S. Crypto Reserve has sparked significant interest in the cryptocurrency market. The initiative, which includes XRP, SOL, and ADA, along with BTC and ETH, has led to a surge in the prices of these digital assets. The news came just days before the first-ever crypto summit, further fueling market excitement and speculation.

The proposed Crypto Reserve has been met with both praise and criticism. While many in the crypto community see it as a step toward legitimizing crypto assets nationally, others have raised concerns about the timing and potential conflicts of interest. One of the most immediate concerns was the highly leveraged trade executed by an anonymous crypto whale just hours before Trump's announcement. The trader went 50x long on Bitcoin and Ethereum, turning a $4 million position into $200 million before exiting most of their trades, securing a profit of just over $6.5 million in less than 24 hours. This has triggered widespread speculation about potential insider trading.

Another point of controversy revolves around David Sacks, Trump’s newly appointed Crypto Czar. Derek Martin, founder of Pathfinder Research, pointed out that Sacks has long-standing financial ties to Bitwise Asset Management, which holds Bitcoin, Ethereum, Solana, XRP, and Cardano—the very assets included in the proposed Crypto Reserve. Martin argued that Sacks’ role as a major investor in Bitwise via Craft Ventures since 2017 suggests a potential conflict of interest, as the announcement directly benefited Bitwise and its investors.

In response to the allegations, Sacks quickly denied any wrongdoing, stating that he sold all his cryptocurrency holdings, including BTC, ETH, and SOL, before the start of the administration. He further clarified that he previously held a $74,000 position in the Bitwise ETF, which he sold on January 22. Sacks dismissed claims of “large indirect holdings” and assured that he would provide an update once the ethics review process is complete.

Beyond concerns over insider trading and conflicts of interest, industry leaders have voiced differing opinions on the structure of the U.S. Crypto Reserve. Coinbase CEO Brian Armstrong suggested that Bitcoin alone might be the best choice, arguing that it provides the clearest narrative as a digital successor to gold. He proposed a market cap-weighted index of top cryptocurrencies to maintain neutrality. Meanwhile, Ki Young Ju, founder of CryptoQuant, offered a more geopolitical perspective, warning that the U.S. could be weaponizing cryptocurrency markets. He asserted that Trump’s policies have shifted moral standards in the industry, favoring assets that align with U.S. national interests. According to Ju, this strategy could marginalize Bitcoin and Ethereum, which have long sought neutrality as global digital assets.

The proposed U.S. Crypto Reserve has the potential to significantly impact the cryptocurrency market. The inclusion of XRP, SOL, and ADA, along with BTC and ETH, could lead to increased adoption and legitimacy for these digital assets. However, the concerns surrounding insider trading and conflicts of interest must be addressed to ensure the integrity of the initiative. As the crypto summit approaches, all eyes will be on the developments surrounding the U.S. Crypto Reserve and its potential implications for the future of digital currencies.