Negotiation Tactics in Real Estate and Crypto
The phrase, “Ask for 1,000 to settle at 500,” encapsulates a classic real estate negotiation strategy. This approach involves making an initial extreme demand to create leverage over the opposing party, ultimately allowing you to achieve your desired outcome at a significantly lower price. Interestingly, U.S. President Donald Trump, who previously made his mark as a real estate tycoon, appears to be employing a similar strategy in his quest to establish a strategic cryptocurrency reserve, which is expected to include bitcoin (BTC) and potentially ether (ETH).
On Sunday, Trump took to Truth Social to announce his expectation that payments-focused cryptocurrencies such as XRP, Solana’s SOL, and Cardano’s ADA would be incorporated into the strategic digital asset reserve alongside bitcoin and ether. Initially, this declaration sparked exuberance in the market, propelling the total cryptocurrency market capitalization by 11%, or an impressive $300 billion, reaching a staggering $3.09 trillion.
However, the excitement was short-lived as market participants began to voice concerns. Critics pointed out that Trump might be misinformed or lacking understanding regarding the inclusion of XRP and ADA in the reserve. As reality set in, it became evident that Trump still requires Congressional approval, and his plans to invest in altcoins seem contradictory to the Department of the Treasury’s efforts to reduce costs and tackle national debt.
“A significant issue here is the optics. When you include altcoins whose use cases are still developing and cannot be deemed ‘nationally strategic,’ you open the door to assumptions of insider dealings, even if these assumptions are unfounded. This potential perception can be politically damaging, even among certain segments of crypto enthusiasts,” stated Jeff Park, head of alpha strategies at Bitwise Investment Management, on X.
Park further commented, “Trump is about to discover what bitcoin—and only bitcoin—truly represents in the crypto landscape.” Nevertheless, some observers believe that the mention of altcoins may serve as a strategic move to overwhelm resistance from Congress, thereby enhancing leverage in discussions about the proposed crypto reserve.
“The announcement is likely part of Trump’s traditional negotiation tactics. By calling for a Strategic Reserve that includes XRP, SOL, and ADA, he might be positioning himself to secure a reserve primarily of BTC (and perhaps ETH),” noted Ilan Solot, senior global market strategist at Marex Solutions, in a client note titled “Curb Your Enthusiasm.” Solot added that while the U.S. may retain an existing stockpile of seized digital assets, the likelihood of the government purchasing new BTC is less than 50%. The probability of ETH acquisitions is minimal but conceivable, whereas the chances of buying altcoins are exceedingly low.
Critics of XRP and ADA argue that these cryptocurrencies lack the established real-world utility and presence that Ethereum and Solana possess, both of which actively facilitate financial activities through stablecoins. Furthermore, the Chicago Mercantile Exchange (CME) has yet to announce plans to list futures for XRP and ADA, which likely contributes to the opposition against including these coins in the national reserve. It’s important to note that prior to approving spot bitcoin and ether exchange-traded funds (ETFs), the SEC had already OK’d ETFs that invest in CME-listed BTC and ETH futures, relying on the exchange’s monitoring system to mitigate concerns about price manipulation.
Jason Atkins, chief commercial officer at Auros, a crypto-making firm, explained that market reactions to Trump’s announcements typically unfold in three distinct phases. The first phase is characterized by rampant rumors, followed by a second phase marked by a hyperbolic announcement and culminating in tough negotiations. “The second phase is initiated by an official announcement from Trump or his team, which often mirrors the speculative nature of the first phase. His negotiation style—defined by hyperbole, exaggerated promises, and demands beyond immediate feasibility—frequently leads to an initial surge in sentiment. We witnessed this dynamic overnight as the market responded positively, largely due to the relief following the risk reduction in phase one. Nevertheless, caution is advised,” Atkins remarked in a late Monday email to CoinDesk.
Atkins further emphasized that the potential for another leverage washout remains high as investors reassess the realities of bureaucratic processes, negotiations, and the uncertainties surrounding the actual flow of funds. “Given that Congressional approval remains a significant hurdle and the timing of real fund movements is unclear, traders and investors will need to determine whether this is a structural shift in the market or merely another cycle of speculation-driven volatility,” he concluded.
