President Donald Trump's announcement of a strategic cryptocurrency reserve basket for the United States has sparked debate among industry leaders. Many argue that Bitcoin (BTC) should be the sole reserve asset.
This debate arose after the presidential working group was instructed to establish the reserve following Trump's executive order on digital assets.
Controversial Choices? Experts Debate Trump's U.S. Cryptocurrency Reserve
According to the official announcement, the proposed cryptocurrency reserve is set to include Bitcoin, Ethereum (ETH), XRP (XRP), Solana (SOL), Cardano (ADA), and other digital assets. This initiative aims to strengthen the U.S. as a global leader in the cryptocurrency field.
Notably, this announcement has triggered significant price surges for the coins. However, experts remain sharply divided over the selection of assets included in the reserve.
Coinbase CEO Brian Armstrong commented on Trump's strategic cryptocurrency reserve plan. In his latest post on X (formerly Twitter), he shared his thoughts on asset allocation.
"Bitcoin alone would probably be the best choice - the simplest, with a clear narrative as the digital gold successor." - Post
However, if diversification is necessary, he proposed using a market capitalization-weighted index of cryptocurrency assets to ensure neutrality. Despite considering both options, Armstrong emphasized that a Bitcoin-only reserve would be the easiest path.
Investor and writer Fred Kruger also supported a market-weighted approach to the proposed cryptocurrency reserve.
"The strategic cryptocurrency reserve should be market-weighted like the S&P 500." - He said.
He outlined the proposed allocation, excluding foreign assets and stablecoins. Bitcoin would make up 75%, Ethereum 12.4%, XRP 5.7%, Solana 3.1%, Dogecoin (DOGE) 1.4%, and Cardano 1.0%. Smaller allocations were designated for Litecoin (LTC), Avalanche (AVAX), Polkadot (DOT), and Cosmos (ATOM).
Meanwhile, many in the cryptocurrency community have expressed disappointment. Jeff Park, Head of Alpha Strategies at Bitwise, was one of the advocates for a Bitcoin-only reserve.
"Trump's big political blunder was underestimating how important it is for the strategic reserve to be Bitcoin-only." - Park posted.
He warned that including altcoins of unclear national significance could jeopardize the perception of internal trading. Park stated that Bitcoin should be the sole strategic reserve asset, but broader cryptocurrency adoption can still be supported from an investment perspective.
Even long-time Bitcoin skeptic Peter Schiff acknowledged the logic of a BTC reserve. Despite his opposition, he recognized Bitcoin as the "digital gold" while comparing it to gold reserves. However, he questioned the inclusion of XRP, criticizing its necessity.
"But what is the rationale for holding XRP? Why is that necessary?" - Schiff mentioned.
Alex Shu, Research Partner at Mint Ventures, alleged that Trump made a politically motivated decision to reward projects he has financially supported. He referred to this move as Trump's "advertising slot" within the presidential powers.
"But in the long run, pushing assets like ADA and XRP as reserve holdings is absurd. This undermines the legitimacy of BTC as the strategic reserve and further reduces the chances of a federal-level BTC reserve bill passing." - He said.
He also pointed to the narrow Republican majority in the House. Therefore, he suggested that the likelihood of a bill including SOL, ADA, and XRP in the national reserve is low.
Shu proposed the only viable option as a sovereign wealth fund controlled by the Treasury Department, allowing Trump to purchase these assets without congressional approval.
"How likely is that? How much money would have to flow into Trump's orbit for him to issue an executive order to buy SOL, XRP, ADA with taxpayer funds? Trump's style is to make big headlines with minimal effort. He won't make a massive investment or take a big risk unless the personal upside is substantial," he questioned.
Former BitMEX CEO Arthur Hayes took an even more critical stance, dismissing Trump's cryptocurrency reserve proposal as mere rhetoric.
"There's nothing new here. It's just talk," he argued.
He claimed that the government lacks the resources to purchase Bitcoin or other cryptocurrencies unless it borrows funds or revalues gold without congressional approval.
