Original: The Kobeissi Letter
Compiled by: Yuliya, PANews
Last night, US President Trump officially announced the establishment of the "US Strategic Crypto Reserve". This historic move not only marks the further enhancement of the status of cryptocurrency in the global financial system, but also triggered sharp market fluctuations. The price of Bitcoin has returned to above $94,000, and the overall market value of cryptocurrency has surged by more than $300 billion in just a few hours. This article will deeply analyze the background, market reaction and potential impact of this announcement, and look forward to the future direction of US encryption policy.
Market reaction
In addition to announcing the creation of a “Crypto Strategic Reserve,” Trump pledged to “ensure that the United States becomes the global hub for cryptocurrency.” The news quickly sparked market frenzy, especially around some of the digital currencies mentioned in the statement, such as Ripple ($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 leaders Bitcoin (BTC) and Ethereum (ETH) were not mentioned. But soon after, Trump made it clear in an updated statement: "Obviously, Bitcoin (BTC) and Ethereum (ETH) will become core components of the reserve as other valuable cryptocurrencies."
This additional statement further boosted market sentiment, and the price of Bitcoin quickly rebounded to $94,000, up nearly 20% from its recent low. Since last Friday, the price of Bitcoin has soared from $78,200 to the current level of over $94,000, completely breaking out of the bear market range and is currently only about 16% away from its all-time high.
Background and potential impact
This move by the Trump administration was not without warning. 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 United States, including Solana, USD Coin, and Ripple.
A few days ago, Trump's son Eric Trump also posted a post saying " ₿uy the dips". At the same time, Trump's crypto adviser David Sacks also 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 cryptocurrency summit at the White House on March 7, and it is widely speculated that more digital currencies may be included in the reserve list by then.
In addition, the establishment of this strategic reserve may pave the way for transferring the annual expenditure of the US federal government to blockchain technology. Tesla CEO Elon Musk proposed a month ago to place the US$6.9 trillion annual expenditure on a decentralized ledger to use blockchain technology to reduce billions of dollars in annual audit costs.
Pro-Crypto Government
It is worth noting that the initial proposal only involved the reserve of Bitcoin, planning to acquire 2.2 million to 4 million Bitcoins. However, with the announcement of the strategic reserve, the scope of the reserve has been expanded to include a variety of cryptocurrencies, but the government has not yet provided a specific explanation for this.
Driven by the Trump administration, the United States has ushered in an unprecedented pro-crypto era. The following policies and events have further consolidated this trend:
- Pro-crypto Securities and Exchange Commission (SEC) leadership;
- President Trump’s pro-crypto stance;
- Announcement of crypto reserve plan;
- SEC drops multiple lawsuits against cryptocurrencies;
- Trump launches his own "Meme coin";
- The SEC has made it clear that Meme coins are not securities.
This series of measures shows that the US government is actively embracing cryptocurrencies and the blockchain technology behind them.
The next catalyst for the crypto market
Currently, the crypto market is looking for new catalysts to drive further development. Although many of Trump's campaign promises have been fully digested by the market, there are still many uncertainties in the future. For example, the market is generally concerned about whether Bitcoin can hit a record high this month. In addition, as Trump's crypto summit approaches, the disclosure of more policy details may have a profound impact on the market.
Against this backdrop, the tech stock market also reacted positively. Last Friday, the Nasdaq 100 index rose 2% in just three hours before the close, even though there was no obvious good news at the time. The market speculated that someone might have learned about the crypto reserve in advance. In addition, as the news about the cryptocurrency reserve ferments, it is expected that tech stocks may open higher when U.S. stock futures open.
