Trump's Crypto Reserve: A Storm of Uncertainty and Backlash
1min read On March 2, 2025, former US President Donald Trump announced the creation of a strategic US Crypto Reserve on Truth Social, a social media platform. The crypto market initially responded positively, with prices surging shortly after the announcement. However, the market later experienced a sell-off and crashed, leaving many questions unanswered and sparking unexpected backlash.
The primary causes of the market crash were uncertainty and market sentiment. Trump's crypto reserve still needs a Congress vote, which is a time-consuming process. Additionally, the inclusion of altcoins such as XRP, Solana, and Cardano's ADA, along with Bitcoin and Ethereum, raised concerns among crypto experts and analysts. They argued that limiting the reserve to Bitcoin would have been a safer approach, as including multiple crypto coins could lead to unwanted market manipulation.
The billionaire and palantir co-founder Joe Lonsdale openly opposed the initiative, and criticisms also came from Trump's advisory council. David Sacks, the Crypto Czar, labeled the initiative an "insane grit." Despite the backlash, some states are considering creating their own crypto reserves, with around 22 states proposing bills for a Bitcoin Reserve. However, the focus on Bitcoin reserves in these states contrasts with Trump's initiative, which includes other coins, raising questions about the coins held by the reserve rather than the concept of a reserve itself.
Including altcoins in the US Crypto Reserve is a controversial decision. While Bitcoin is widely recognized as a store of value, altcoins like Cardano lack the same level of acceptance and infrastructure. Cardano, for example, primarily supports dApps but doesn't have ETFs and is not widely accepted by traditional financial systems. In contrast, Bitcoin has a proven history and deep-rooted infrastructure, with over 38,000 Bitcoin ATMs globally.
The heated debate surrounding Trump's Crypto Reserve centers on its composition rather than the concept of a reserve. While Bitcoin is universally recognized as a store of value, including altcoins introduces uncertainty, regulatory challenges, and potential market instability. The backlash from industry leaders and policymakers highlights the risks of diversifying beyond BTC. Meanwhile, individual states are moving ahead with their own Bitcoin reserves, signaling that the idea of a crypto reserve isn't entirely outlandish, but the execution is a concern. As the debate continues, the future of the US Crypto Reserve hinges on trust, regulation 