Crypto prices rally after Trump backs five coins for 'crypto reserve'

U.S. President Donald Trump has unveiled the names of five cryptocurrencies he hopes to include in a new strategic reserve, aiming to make the United States the "cryptocurrency capital of the world." This move signals a proactive effort by the Trump administration to establish dominance in the cryptocurrency sector.

Following Trump's announcement, the market prices of the five cryptocurrencies he mentioned—Bitcoin, Ethereum, XRP, Solana, and Cardano—all experienced rapid increases. This reaction underscores the market's sensitivity to the president's policy maneuvers, suggesting a strong correlation between presidential endorsements and market behavior.

Throughout his presidential campaign, Trump has actively sought the support of the cryptocurrency community. Former President Joe Biden had previously cracked down on cryptocurrencies due to concerns about fraud and money laundering. Trump's action represents a stark contrast to the policies of the previous administration, marking a clear divergence in approach.

It remains unclear how the new reserve will operate. Further information is expected to be released on Friday when Trump hosts the inaugural cryptocurrency summit at the White House. This summit is anticipated to provide a clearer blueprint for the details of the cryptocurrency strategic reserve, offering insights into its structure and function.

In a social media post on Sunday, Trump stated that he signed an order "directing the presidential task force to advance a strategic reserve of cryptocurrencies including XRP, Solana, and Cardano." Approximately an hour later, he added in another post: "And, of course, Bitcoin and Ethereum, as other valuable cryptocurrencies, will be central to the reserve." These posts explicitly clarified the composition of the primary cryptocurrencies within the strategic reserve, establishing its core components.

The three cryptocurrencies he initially mentioned rose by as much as 62% on Sunday. Bitcoin and Ethereum also rose by more than 10% each. These gains mark a new upward trend in cryptocurrency prices, following a surge and subsequent sharp decline after his election. This suggests that the market is optimistic about the Trump administration's cryptocurrency policies, anticipating favorable regulations and growth opportunities.

Shortly after taking office, Trump signed an executive order establishing a presidential task force responsible for proposing new cryptocurrency laws and regulations. The order requires the task force to "assess the feasibility of creating and maintaining a national digital asset reserve" that could use "cryptocurrencies lawfully seized by the federal government through law enforcement efforts." This move aims to lay the groundwork for the legal use and management of cryptocurrencies, ensuring their responsible integration into the financial system.

It is currently uncertain whether the creation of the new national strategic reserve will require congressional approval. Trump had previously been a critic of cryptocurrencies, telling Fox News in 2021 that Bitcoin was a "scam." However, in recent weeks, both he and his wife Melania Trump have launched their own cryptocurrencies, leading to accusations that they are attempting to profit from his White House policies. This shift raises questions about potential conflicts of interest and the motivations behind his policy changes, sparking debate over ethical considerations.