US President Donald Trump confirms the release of a 'Crypto Strategic Reserve,' which triggered the price movements. This led to the major driving force in the cryptocurrency markets in March, showing high volatility.
On Sunday, the President announced on posts in Truthsocial that the US government is planning to create a national strategic cryptocurrency reserve, which will include Bitcoin, XRP, Solana, Cardano, and Ether.
He further mentioned that the United States will become the 'crypto capital of the world.' Trump mentioned this as one of the promises in his presidential elections last year.
Since this announcement from Trump over this weekend, Bitcoin has soared back to US$87,805.80 per bitcoin after a roller-coaster week. XRP, Solana, and Cardano saw a huge rise in prices after Trump's post went viral.
Trump has confirmed plans to impose 20% tariffs on imports from Canada and Mexico, which led to rough falls in US stocks.
In Truth Social, Trump said a reserve was in the works as a part of his executive order on digital assets issued in January. The prospect of a reserve is a major step in Trump's vision to establish the US as the crypto capital of the world. The US has already released strategies in military and medical equipment stockpiles.
There are around 200,000 units of Bitcoin tokens from criminal seizures. As of Monday, that works out to be more than US$17B in value. Bitcoin is the oldest cryptocurrency in the market, followed by Ether in second place. XRP ranks fourth, Solana holds the sixth spot, and Cardano comes in at eighth.
The president's announcement led to spikes and declines across all five cryptocurrencies in just a day. Some crypto backers suggest that bitcoin would probably be the best option, the simplest and clearest story as a successor to gold.
Most of the cryptocurrency investors responded on a positive note after the announcement, but some people pointed out the irony of the US Federal Government having much more power over a currency that is supposedly to be decentralized.
Some experts say relying on Bitcoin can turn out to be risky for debt reduction. According to Chester Spatt, Professor of Finance at Carnegie Mellon University, "Just because an asset has gone up in the past doesn't mean it will go up in the future."
Meanwhile, according to the concerns of crypto enthusiasts, questions were raised about what would happen to Bitcoin if it actually worked. When the US decides to pay down its debts by selling off the reserves when the Bitcoin prices increase massively, there will be a significant decrease in price just by triggering the transaction itself.