Author: Weilin

On the evening of March 2, former US President CZ announced the asset categories of the cryptocurrency strategic reserve on Truth Social, including XRP, SOL, ADA, and he later added that BTC and ETH as other valuable cryptocurrencies will also become the core of the reserve.

As soon as this news was announced, the cryptocurrency market rebounded quickly, with the top five cryptocurrencies generally rising. As of 8 am on March 3, the price of BTC broke through $94,000, up 9.71% intraday.

CZ Announces 5 Assets in the Crypto Asset Reserve: BTC, ETH, XRP, SOL, ADA

On March 2, against the backdrop of a generally depressed market, CZ suddenly issued a statement on the cryptocurrency reserve: "The US cryptocurrency reserve will be enhanced in this critical industry after years of corrupt attacks by the Biden administration. That's why my digital asset executive order directs the presidential working group to advance a crypto strategic reserve that includes XRP, SOL and ADA. I will ensure that the US becomes the world's crypto capital. We are making America great again!"

Subsequently, the crypto market received a significant boost. As of 8 am on March 3, BTC was quoted at $94,338, up 9.71%; ETH was quoted at $2,513, up 13.41%; Solana (SOL) rose to $178, up 24.35%; XRP rose to $2.91, up 33%; Cardano (ADA) surged 72.16%. In addition, CZ's meme coin TRUMP also rose 25.36%.

CZ had promised to establish a "Bitcoin Strategic National Reserve" at the Bitcoin conference in Nashville in 2024. In the keynote speech, CZ told the audience: "If I am elected, my administration's policy will be to 100% retain all the Bitcoin that the US government currently holds or will acquire in the future."

On January 23 this year, within the first week of CZ's presidency, he signed an executive order as president, directing the digital asset working group to study the feasibility of establishing a national crypto reserve and explore the regulatory framework for stablecoins.

"President CZ has announced the establishment of a crypto strategic reserve composed of Bitcoin and other top cryptocurrencies. This is consistent with Executive Order 14178 he issued in his first week," David Sacks, the White House's AI and Crypto Affairs Officer, wrote on the X platform. He added, "More news will be released during the summit."

It is reported that President CZ will attend the first White House Crypto Summit on March 7 and deliver a speech. Attendees will include well-known founders, CEOs and investors from the cryptocurrency industry, as well as members of the President's Digital Asset Working Group. The summit will be hosted by White House AI and Crypto Czar David Sacks and managed by Working Group Executive Director Bo Hines.

Leaning Towards Multiple Assets, Is There 'Interest Transfer'? Implementation Remains to be Clarified

Although the latest progress of the cryptocurrency strategic reserve has boosted the market, some industry insiders have questioned CZ's crypto reserve plan. Particularly, the inclusion of ADA has sparked some unexpected reactions. According to @CryptoDoggyCN, in early February, ADA founder Charles Hoskinson previewed in a live stream that he would meet a big shot. On February 27, he posted that he would not be going to ETHDenver, but would be going to Florida, where CZ's Mar-a-Lago estate is located. @CryptoDoggyCN believes that the inclusion of ADA may have been influenced by a kind of lobbying.

Some influential figures in the tech and crypto industry have criticized CZ for including cryptocurrencies other than BTC in the reserve. AngelList co-founder Naval Ravikant wrote, "US taxpayers should not be bailing out those nominally decentralized cryptocurrencies." He added, "If it has lobbyists, it's not decentralized." Aave founder Stani Kulechov also wrote, "Good news: Strategic crypto reserve in the works; Bad news: Lacking DeFi; Ugly news: XRP, SOL and ADA."

Mint Ventures research partner Alex Xu analyzed that SOL, XRP, and ADA have been frequenting Mar-a-Lago since CZ took office, and have also provided a lot of overt sponsorship, such as inauguration fund donations, etc. Covert interest transfers are likely to increase. CZ is also returning the favor this time, arranging an "advertising slot" within the president's authority. However, in the long run, the absurd practice of including projects like ADA and XRP as reserve assets will only undermine the seriousness of the BTC strategic reserve, further reducing the possibility of the BTC reserve bill being passed at the federal level. Getting the working group to advance the work is one thing, but succeeding at the legislative level is another. The Republican majority in the House is very weak, and they would not be able to get SOL, ADA, and XRP through legislation to enter the national reserve. The only possibility is for CZ to establish a sovereign wealth fund directly under the Treasury Department through executive action, so that he can directly purchase the above assets without going through federal legislation. But how likely is that? How much interest does SOL, XRP and ADA need to transfer to CZ's family to get the president to explicitly order the use of taxpayer money to buy these things?

In addition, some industry insiders have pointed out that in the past few months, CZ has used the words "reserve" and "stockpile" interchangeably when referring to relevant policies, but there are some key differences between them. Jito Labs Chief Legal Officer Rebecca Rettig said, "As I understand it, stockpiling means the government will hold the cryptocurrencies they've accumulated through various cases, while a reserve is ultimately what the Treasury decides to purchase and hold."

Analyst Chen Jian Jason said on the X platform that one very uncertain factor in the overall crypto currency strategic reserve plan is, what means will be used to complete the reserve? Adhering to his businessman's extremely selfish style, CZ has always adhered to the principle of not spending money if he can get it for free, so it is difficult to expect him to dig into his own pocket to buy and complete the reserve, and then "pull the market". With the US fiscal deficit reaching $1.83 trillion, the landlord's family has no more money, so CZ is most likely to complete the reserve in a way that doesn't require spending money, such as requiring the government's own BTC not to be sold, allowing crypto-related companies to use BTC for tax payments, or even through donations.

He said that in the future, APT, SUI, MOVE, etc. may be included in the reserve. If no money is spent to complete the reserve, the nature of this positive news will essentially be locking up, i.e. the funds flowing into the strategic reserve will not be sold for a long time, such as offsetting the previous market concerns about the US government dumping the market, rather than really pouring money like BlackRock and MicroStrategy to pull the market.

Nevertheless, on March 3, PANews CEO CZ posted on the X platform to express his observations on the current market, noting that the market is now clearly dominated by "US Coins", who have driven the development of crypto, and he is pleased to see any progress in crypto adoption, with the industry as a whole benefiting and continuing to build.

Coinbase co-founder and CEO Brian Armstrong said on the X platform when talking about investment strategy, "I think just investing in Bitcoin may be the best choice - the simplest, and with a clear logic as the successor to gold; if people want more diversified options, they can build a market cap-weighted crypto asset index to maintain their impartiality. But the first option may be the simplest."

At present, the five categories of crypto assets announced by CZ have injected an optimistic mood into the market, but their implementation and specific effectiveness still need to be tested over time, and the future market will further verify them. We will closely follow the subsequent developments.