U.S. Crypto Strategic Reserve Gains Traction Following Presidential Announcement
A potential U.S. crypto strategic reserve seems increasingly plausible after President Trump’s recent announcement over the weekend. According to a research report released by Wall Street bank Citi (C) on Monday, the President revealed that a selection of digital assets including XRP, Solana (SOL), and Cardano (ADA) would be incorporated into a strategic reserve. He later expanded this list to include Bitcoin (BTC) and Ethereum (ETH).
Analyst Alex Saunders from Citi remarked, “The announcement indicating that the U.S. government may become a strategic holder of digital assets would significantly enhance the perceived legitimacy of this asset class.” Currently, the U.S. government possesses approximately $19 billion in cryptocurrencies, predominantly in Bitcoin, compared to a staggering $750 billion in gold reserves.
The report highlighted that the bulk of the government’s cryptocurrency holdings, primarily acquired through seizures, are in Bitcoin. This suggests that any accumulation of other digital assets is likely to be financed through open-market purchases. However, Citi cautioned that the “selection criteria for these assets remain unclear.” Additionally, the bank noted that publicly announcing such investments can lead to price fluctuations that may adversely affect investors, a situation reminiscent of the U.K. government’s experience with gold back in the late 1990s.
Furthermore, Citi emphasized that greater transparency regarding the criteria for selecting tokens to be included in the reserve would bolster market confidence. In a related report last month, broker Bernstein suggested that the Federal Reserve could consider issuing debt or liquidating portions of its gold reserves to finance the acquisition of cryptocurrencies.
