4 Unanswered Questions About Trump's Cryptocurrency Reserve Fund

At the Bitcoin conference in Nashville in July, Donald Trump pledged to create a "strategic national bitcoin reserve." As of Sunday, March 2, the reserve also includes ether (ETH), XRP, Solana (SOL), and Cardano (ADA) along with bitcoin (BTC). Trump's message on Truth Social stated that the president's working group is creating a larger-scale cryptocurrency reserve fund, attracting strong feedback from the cryptocurrency community. Many complain that the reserve is not only tied to bitcoin. Others ask whether the US should hoard tokens like XRP and Cardano. Still others wonder what could have changed Trump's thinking. Trump said he wants to turn the US into the "world's cryptocurrency capital," and his timing seems to target retail traders. "I love the genius of announcing a strategic reserve fund on Sunday, when traditional markets are closed and Wall Street is sleeping. For the first time, retail investors win," Trump's son, Eric Trump, tweeted on Sunday night. The price of assets soared almost instantly, especially ADA benefited. However, there is still much we do not know about the "Crypto Strategic Reserve". Trump's Sunday morning message is the first time the administration has announced that there will be five assets in the investment portfolio. Furthermore, the details are still unclear. Here are some big questions.

1. Is he serious? The United States owns more than 200,000 BTC that they claim through seizures. Experts say this could be the basis for a National Reserve without congressional approval. But a large currency reserve will certainly require congressional approval. Wyoming Senator Cynthia Lummis has proposed a bill to allow the US to buy $20 billion in the first year and another 20,000 BTC every four years to bring the US reserve to one million BTC. Lummis' stance on multi-currency reserves is still not known. She plans to meet with industry leaders to discuss this issue on March 11. Will she propose another bill? Another question is how the United States can pay for expanded investment portfolios. Cryptocurrencies are publicly traded and publicly priced. It is unclear from Trump's message whether his administration is seeking new spending allocations. Can the United States sell gold to buy cryptocurrencies? We do not know.
2. Why include Solana, XRP, and Cardano? Will there be others? As many people on X have noted, there are valid reasons to include Bitcoin in strategic reserves. 'We are talking about reserves, and Bitcoin is an undisputed store of value for the digital age,' noted Hunter Horsley, CEO of Bitwise. Bitcoin is 'digital gold' and BTC's dominance in the market remains above 60%. BTC is the first asset that any holder holds. It's harder to make a simple case for other currencies. For example, Cardano, with a dominance of 1.1%, is best known as an environment for building decentralized applications (dApp). It does not have an ETF like bitcoin and ether and is not accepted by TradFi to a nearly similar extent. These five coins were chosen for two different reasons. BTC and ETH are completely decentralized. Solana, XRP, and Cardano are produced in the US, and Trump may bring them in to promote the US cryptocurrency industry. Trump's announcement seems to hint at the possibility that the reserves may include other coins in the future.
3. Do the states follow? Jesse Hamilton of CoinDesk recently wrote that as many as 22 states are considering creating their own cryptocurrency reserves, primarily in bitcoin. Are they considering more asset types?
4. Does cryptocurrency support it? The reaction to Trump's announcement throughout the professional cryptocurrency industry ranges from lukewarm to criticism. Trump announced the reserve in Nashville with the aim of pleasing his audience. However, it is unclear whether the cryptocurrency industry fully supports his plan to introduce the reserve or not. If this measure is opposed by the National Assembly, the government will need the support of the industry, so it could be a concern for supporters. Surely, Polymarket bettors are skeptical that reserves will soon appear.