WEST PALM BEACH, Florida, March 2 (Reuters) - The U.S. President took to social media to unveil the names of five digital assets designated for inclusion in a new U.S. strategic reserve of cryptocurrencies on Sunday, causing a surge in their market value.
In a post on Truth Social, Trump revealed that his January directive on digital assets would establish a stockpile of currencies that encompass bitcoin, ether, XRP, solana, and cardano, names that had not been priorly disclosed.
Trump later reaffirmed, "And, obviously, BTC and ETH, as other valuable Cryptocurrencies, will be at the heart of the Reserve."
Following the announcement, Bitcoin, the world's largest cryptocurrency by market value, saw an increase of over 11% to $94,164 on Sunday afternoon. Ether, the second largest, rose by approximately 13% to $2,516.
The overall cryptocurrency market surged by around 10%, or over $300 billion, in the hours post Trump's declaration, according to CoinGecko, a cryptocurrency data and analysis company.
XRP represents the token of cryptocurrency company Ripple Labs, which backed a super PAC aiming to influence congressional elections in favor of the crypto industry last November.
"This move signifies a shift towards active involvement in the crypto economy by the U.S. government," said Federico Brokate, head of U.S. business at 21Shares, a digital assets investment management firm. It holds the potential to expedite institutional adoption, offer more regulatory clarity, and fortify the U.S.'s leadership in digital asset innovation.
James Butterfill, head of research at asset manager CoinShares, expressed surprise at assets other than bitcoin being included in the reserve, noting these assets as more akin to tech investments. "The announcement indicates a more patriotic stance toward the broader crypto technology space, with little consideration for the fundamental qualities of these assets."
Trump garnered support from the crypto industry in his 2024 election bid and swiftly began endorsing it. He is set to host the first White House Crypto Summit on Friday, with his family also launching endeavors in the sector.
During his Democratic predecessor's term, Joe Biden, regulators toughened their stance on the industry to safeguard Americans against fraud and money laundering.
Under Trump, the Securities and Exchange Commission retracted investigations into several crypto companies, including the largest U.S.-based crypto exchange.
Recently, cryptocurrency prices fluctuated, with major digital currencies erasing most of the gains following Trump's election win wave of enthusiasm across the industry.
Analysts point out the market's necessity for a catalyst to move higher, such as indications of the U.S. Federal Reserve intending to lower interest rates or a clear pro-crypto regulatory framework from the Trump administration.
Reportedly, Geoff Kendrick, an analyst at Standard Chartered, aims for bitcoin to reach $500,000, surpassing its $109,071 record high, before Trump's term ends.
Regulatory filings in the U.S. reveal that while hedge funds continue to be the main crypto buyers, banks and sovereign wealth funds are also entering the market.
Quarters show that asset managers increased allotments to U.S. ETFs linked to the price of spot bitcoin in the fourth quarter of 2024.
Experts and analysts hold contrasting views on whether an act of Congress will be required to establish the reserve. Some suggest utilizing the U.S. Treasury's Exchange Stabilization Fund, capable of purchasing or selling foreign currencies, as a means to create the reserve.
Trump's crypto group envisioned exploring the potential of constructing the stockpile using cryptocurrencies confiscated in law enforcement actions.