‘Only one digital asset in the world right now meets the bar and that digital asset is Bitcoin,’ Tyler Winklevoss said.
President Donald Trump announced plans for the creation of a cryptocurrency strategic reserve on March 2, fulfilling a campaign pledge to turn the United States into “the crypto capital of the world.”
During the 2024 election campaign, Trump fully embraced Bitcoin and the wider cryptocurrency industry, advocating for pro-crypto policies. Shortly after returning to the White House, the president signed an executive order to promote U.S. leadership in digital assets and financial technology.
The announcement, which sparked a rally in crypto markets after a month-long skid, comes ahead of the president’s first White House Crypto Summit on March 7.
Here is what to know about Trump’s proposed crypto reserve plan.
What Is a Crypto Reserve?
A crypto reserve would function as a national stockpile that may be accessed for future use.
The U.S. government already maintains several types of reserves.
The Strategic Petroleum Reserve is the world’s largest supply of emergency crude oil. The United States stores vast gold reserves at facilities across the country. The National Defense Stockpile is a reserve of critical and strategic materials necessary to reduce the country’s dependence on foreign countries, particularly in the event of a national emergency.
While a crypto reserve might not be critical in an emergency, it can still present several advantages, including economic diversification, geopolitical leverage, and a hedge against inflation.
For Trump, a crypto reserve may be a tool to elevate the domestic crypto industry after what he describes as “years of corrupt attacks” under the previous administration.
The U.S. government currently holds more than 200,000 Bitcoins accumulated from law enforcement seizures rather than active purchases. At current prices, this is worth more than $18 billion.
‘Bullish for Bitcoin’
Leading up to Trump’s post on Truth Social, there had been discussion about whether a crypto reserve would be concentrated solely on Bitcoin or diversified in multiple cryptocurrencies.
According to his March 2 posts, Trump will include Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Solana (SOL), and Ripple (XRP).
“A U.S. Crypto Reserve will elevate this critical industry after years of corrupt attacks … which is why my Executive Order on Digital Assets directed the Presidential Working Group to move forward on a Crypto Strategic Reserve that includes XRP, SOL, and ADA,” President Trump said on the social media platform.
“And, obviously, BTC and ETH, as other valuable Cryptocurrencies, will be at the heart of the Reserve,” he later stated. “I also love Bitcoin and Ethereum!”
The decision to feature several digital assets ignited industry debate on social media.
According to Tyler Winklevoss, the co-founder of crypto exchange Gemini, Bitcoin is the only digital asset suitable for a strategic reserve.
“I have nothing against XRP, SOL, or ADA but I do not think they are suitable for a Strategic Reserve. Only one digital asset in the world right now meets the bar and that digital asset is Bitcoin,” he wrote on social media platform X. “An asset needs to be hard money that is a proven store of value like gold.”
Bitcoin critic and gold advocate Peter Schiff, the chief economist and global strategist at Euro Pacific Asset, thinks it would only make sense to have a Bitcoin reserve.
“I get the rationale for a Bitcoin reserve. I don’t agree with it, but I get it. We have a gold reserve. Bitcoin is digital gold, which is better than analog gold. So let’s create a Bitcoin reserve too,” Schiff said on X. “But what’s the rationale for an XRP reserve? Why the [expletive] would we need that?”
MicroStrategy CEO Michael Saylor said Trump’s plans for a reserve is a terrific development for both Bitcoin and the entire crypto sector as it presents a $100 trillion opportunity.
“There’s no way to interpret this other than this is bullish for Bitcoin and bullish for the entire U.S. crypto industry,” Saylor said in a March 3 interview with CNBC. “I believe the best thing for the country is to move forward with an enlightened progressive policy toward digital assets.”
Announcement Triggers Rally
Cryptocurrencies endured an abysmal February, wiping out about $800 billion in value.
Trump’s announcement provided a jolt to the crypto markets, and the impacted coins rocketed on the news.
ADA surged more than 60 percent, XRP advanced 33 percent, and SOL increased 25 percent. Bitcoin and ETH rose 10 percent and 13 percent, respectively.
Overall, the total crypto market cap increased by about $300 billion, according to CoinMarketCap data.
Joe Tigay, a portfolio manager at Rational Equity Armor Fund, says this development could serve as a positive catalyst for the industry, “which had been struggling.”
“A rebound in crypto could: Spark positive momentum for digital assets [and] offer a much-needed boost to the sector,” Tigay said in a note emailed to The Epoch Times.
Final Reserve
The final product could be different from what Trump announced on social media.
Commerce Secretary Howard Lutnick signaled in a recent interview with The Pavlovic Today that a Bitcoin-only strategic reserve would be established and that the other tokens would be “treated differently.”
“The president definitely thinks that there’s a Bitcoin strategic reserve,” Lutnick said. “Now, there will be the question of, how do we handle the other cryptocurrencies. And I think the model is going to be announced on Friday when we do that. So Bitcoin is one thing, and then the other currencies, the other crypto tokens, I think, will be treated differently. Positively, but differently.”
This caused further speculation as to what the endgame could look like.
Matt Hougan, the CIO at Bitwise, thinks the reserve’s makeup will likely “be nearly entirely bitcoin, and it will be larger than people think.” He believes the final plan will be altered in some way as the president and his advisers receive feedback.
“The Trump administration so far seems to follow through on its policy goals, and I expect some version of this proposal will end up going forward,” Hougan said in a March 5 memo. “And while the rollout and specifics have been imperfect, I suspect the final version will look pretty good.”
Trump’s artificial intelligence and crypto czar, David Sacks, said more details will be unveiled at the White House summit on Friday.