Original text: The Kobeissi Letter
Compiled by: Yuliya, PANews
Last night, US President Trump officially announced the establishment of the "US Strategic Crypto Reserve", a historic move that not only marks a further rise in the status of cryptocurrencies in the global financial system, but also triggered a violent market reaction. The price of BTC has returned above $94,000, and the overall market capitalization of cryptocurrencies has surged by more than $300 billion in just a few hours. This article will delve into the background, market reaction and potential impact of this announcement, and look ahead to the future direction of US crypto policy.
Market Reaction
In addition to announcing the establishment of the "Crypto Strategic Reserve", Trump promised to "ensure that the US becomes the global center of cryptocurrencies". This news quickly sparked market frenzy, especially for the digital currencies mentioned in the statement, such as Ripple ($XRP), Solana ($SOL) and Cardano ($ADA).
Since the announcement, these tokens have all seen significant increases, with ADA up 64%, XRP up 30%, and SOL up 21%.
However, in the initial statement, the two market-leading cryptocurrencies BTC and ETH were not mentioned. But shortly afterwards, Trump explicitly stated in an updated statement: "Clearly, BTC and ETH, as other valuable cryptocurrencies, will be core components of the reserve."
This supplementary statement further boosted market sentiment, with the price of BTC quickly rebounding to $94,000, up nearly 20% from its recent low. Since last Friday, the price of BTC has soared from $78,200 to over $94,000 currently, completely breaking out of the bear market range and now only 16% away from its all-time high.
Background and Potential Impact
The Trump administration's move was not entirely unexpected. As early as January 16, the New York Post reported that Trump was expected to propose the establishment of an "America First" crypto reserve, focusing on supporting crypto assets originating from the US, including Solana, USD Coin and Ripple.
A few days ago, Trump's son Eric Trump also posted a "₿uy the dips" message. At the same time, Trump's crypto advisor David Sacks said on social media yesterday that "more news will be announced at the upcoming crypto summit". It is reported that Trump will host the first Crypto Summit at the White House on March 7, and it is widely speculated that more digital currencies may be added to the reserve list at that time.
Furthermore, the establishment of this strategic reserve may pave the way for the US federal government's annual spending to be shifted to blockchain technology. Tesla CEO Elon Musk proposed a month ago to place the $6.9 trillion in US annual spending on a decentralized ledger, using blockchain technology to reduce billions of dollars in annual audit costs.
Pro-Crypto Government
It is worth noting that the initial proposal only involved a BTC reserve, with a plan to acquire 2.2 million to 4 million BTC. However, with the announcement of this strategic reserve, the scope has been expanded to include multiple cryptocurrencies, although the government has not yet provided a specific explanation for this.
Under the push of the Trump administration, the US is entering an unprecedented pro-crypto era. The following policies and events further consolidate this trend:
- Pro-crypto leadership at the Securities and Exchange Commission (SEC);
- President Trump's pro-crypto stance;
- Announcement of the crypto reserve plan;
- SEC withdrawing multiple lawsuits against cryptocurrencies;
- Trump launching his own "Meme coin";
- SEC clarifying that Meme coins are not securities.
These measures indicate that the US government is actively embracing cryptocurrencies and the underlying blockchain technology.
The Next Catalyst for the Crypto Market
Currently, the crypto market is looking for new catalysts to drive further development. While Trump's many campaign promises have been fully digested by the market, there are still many uncertainties ahead. For example, the market is generally concerned about whether BTC can set a new all-time high this month. Furthermore, with the upcoming Trump Crypto Summit, the disclosure of more policy details may have a profound impact on the market.
Against this backdrop, the tech stock market has also shown a positive reaction. Last Friday, the Nasdaq 100 index rose 2% in the last 3 hours before the close, despite the lack of any obvious positive news. The market speculates that someone may have had advance knowledge of the crypto reserve news. In addition, as the news about the crypto currency reserve spreads, tech stocks are expected to open higher in US stock futures.
