Donald Trump's cryptocurrency reserve plan is receiving significant skepticism from the cryptocurrency community. Instead of an independent Bitcoin reserve, he is proposing to fill the national reserve with XRP, Cardano, and other US-based tokens.
The weekend gains of these assets have already evaporated. The likelihood of the reserve bill passing Congress into law appears very low, and this plan may not have a long-term impact on the market.
XRP, ADA Down Over 20%
After Donald Trump announced a US cryptocurrency reserve including XRP, Cardano, and Solana, the market has been in turmoil. During his 2024 presidential campaign, Trump had pledged to establish a Bitcoin reserve, but his recent executive order is focused on other US-based cryptocurrency assets.
The cryptocurrency community has strongly criticized this decision, and the criticism is intensifying:
"I've been thinking about the US strategic Bit/Crypto reserve, and there are two possible outcomes: either the reserve is composed of BTC and the mentioned altcoins are not actually included, or it will accelerate into a degeneracy we've never seen before." – Samson Mow, a prominent opinion leader in the cryptocurrency space.
Essentially, President Trump simply cannot purchase the necessary quantities of altcoins. The Bitcoin reserve was based on the concept that the federal government already controls the related assets due to seizures.
However, Congress must approve new purchases, and some Republicans may hesitate.
"There's nothing new here. Just talk. Let me know when they get congressional approval to borrow money or mark up the price of gold. Otherwise, they don't have the money to buy Bit and shitcoins." – Arthur Hayes, former CEO of BitMEX.
Several community members speculate that Trump's nomination of these altcoins is intended to slow the accelerating cryptocurrency market downturn.
He caused a weekend pump, but it disappeared completely by Monday, and the community is not satisfied. XRP has dropped 18%, Cardano has dropped 23%, and the overall cryptocurrency market is showing significant weakness.
"XRP has been virtually unchanged over the past 10 days, despite the US President posting that ticker and saying it should be part of the US strategic cryptocurrency reserve." – Bloomberg analyst Joe Weisenthal.
Political Support?
There is also a hypothesis that the reason Trump included XRP and ADA is primarily due to political donations to his administration. Solana could also have benefited greatly from the Trump administration, and a TRUMP meme coin was launched on the network.
In other words, it is difficult to say that these assets are included in Trump's expanded reserve plan solely because they are US-based companies. The leadership of each company is also materially entangled with him.
XRP, Cardano, and Solana are all likely to directly benefit from major federal purchases, and the companies' close relationships with the President may have influenced this.
"ETH and SOL make sense given the strong and growing developer activity. But the inclusion of XRP and ADA is not clear. They are almost like ghost chains compared to Ethereum and Solana. The XRPL and Cardano's Total Value Locked (TVL) and stablecoin functionality are relatively small compared to other ecosystem players. To my eyes, it seems to somewhat undermine the overall idea of a Bitcoin, Ether, Solana-type mainstream cryptocurrency reserve asset." - Harrison Seletzky, Director of Business Development at SPACE ID, told BeInCrypto.
In conclusion, there are many obstacles to Trump's proposal. While the Republicans control Congress, the margin is slim. Some Democrats may oppose using tax money for cryptocurrency purchases, and Republican fiscal conservatives may question the impact on federal spending.
Overall, the path for the US President's proposed cryptocurrency reserve to become a reality is long.
