Trump's "carefully selected" strategic reserve assets, why is it specifically this?

Author: 1912212.eth, Foresight News

On the evening of March 2, Trump once again added fuel to the struggling cryptocurrency market. He announced on social media that after years of suppression by the Biden administration, the U.S. cryptocurrency reserves will elevate the status of this key industry. This is why my executive order on digital assets directs the presidential task force to advance a cryptocurrency strategic reserve that includes XRP, SOL, and ADA. I will ensure that America becomes the world capital of cryptocurrency. We are making America great again!

Seemingly not finished, just an hour later, Trump posted again, stating that obviously, BTC and ETH, along with other valuable cryptocurrencies, will be at the core of the reserves. I also like Bitcoin and Ethereum!

As a result of this news, BTC surged from $85,000 to around $95,000, ETH rose from $2,200 to $2,550, SOL bounced back from $140 to around $180, ADA increased from $0.65 to a peak of about $1.17, and XRP climbed from $2.2 to a high of $2.9999. Many altcoins like SUI, ENA, ONDO, etc., also experienced significant gains. The previously pessimistic market sentiment was instantly swept away.

In terms of contract data, the total open contracts across the network saw a liquidation of $825 million in 24 hours, with short positions liquidating $545 million.

From Doubt to Embrace, Trump Fulfills His Promises

As early as 2021, he publicly criticized Bitcoin as a scam, believing it threatened the dollar's hegemony. However, since his campaign for the 2024 election, he has gradually shifted his stance, promising at the Bitcoin 2024 conference that if elected, he would retain all Bitcoin held by the federal government and create a "national Bitcoin reserve." This statement not only implies the fulfillment of this promise but also expands the scope to include other mainstream cryptocurrencies, reflecting his renewed understanding of the strategic value of digital assets.

Currently, the global cryptocurrency market is in a volatile period. Although Trump's election initially sparked a wave of enthusiasm, recent price declines have dampened investor confidence, especially as the Trump celebrity coin TRUMP, while enriching a few, has drained market sentiment, becoming a short-term peak for the cryptocurrency market. Mainstream coins and meme coins have begun to decline, with Bitcoin even dipping below $80,000 recently. In this context, Trump's statement acts like a shot of adrenaline, injecting new vitality into the market.

Crypto czar David Sacks commented, "President Trump announced a cryptocurrency strategic reserve consisting of Bitcoin and other top cryptocurrencies. This aligns with his first week's executive order 14178. President Trump is fulfilling his promise to make America the 'world capital of cryptocurrency.' More details will be revealed at the White House cryptocurrency summit on March 7."

Why These Tokens?

Many investors are curious why the announced strategic reserve tokens are Bitcoin, Ethereum, Solana, XRP, and ADA, rather than others.

Bitcoin: The Undisputed King

As the first cryptocurrency, Bitcoin's status is unshakeable. Its market share has long maintained above 40%, and it is regarded as "digital gold." Trump's choice of BTC is not only due to its global recognition but also its symbolic significance—the beginning of decentralized finance. Including it in the strategic reserve indicates America's emphasis on cryptocurrency leadership while laying a solid trust foundation for the reserve plan.

Coinbase co-founder and CEO Brian Armstrong commented on social media regarding "Trump's push for a cryptocurrency reserve plan," stating that in terms of asset allocation for the strategic reserve, Bitcoin may be the best choice, serving as the successor to gold with the simplest and clearest narrative.

Polymarket data shows that the market's bet on the probability of establishing a Bitcoin strategic reserve by 2025 has risen from 40% to above 60%.

Ethereum: The Cornerstone of Smart Contracts

Ethereum is another beacon in the blockchain world. As a pioneer of smart contracts, ETH supports multiple fields such as DeFi and NFTs, with a total locked value exceeding $100 billion. Its large developer community and rich ecosystem make it a hub for blockchain innovation. Trump's choice of ETH indicates his recognition of the potential for diversification in the crypto economy, rather than merely hoarding a single asset.

In early February this year, Trump's son Eric Trump had already called for buying ETH, stating it was the best time to increase holdings in Ethereum.

Solana: High-Performance L1 Representative

Solana has emerged with its high throughput and low transaction costs, capable of processing tens of thousands of transactions per second, far exceeding Bitcoin and Ethereum. Despite past controversies over network stability, its technical advantages are undeniable. Since 2024, it has attracted a large influx of capital and has been prominent in the meme wave. The Trump celebrity coin TRUMP was also launched on Solana. Trump's inclusion of it in the reserves shows a forward-looking layout for next-generation blockchain technology, aiming to seize the high ground in performance competition. Solana is currently the second-largest public chain after Ethereum, with a market cap exceeding $86 billion.

XRP: A Tool for Cross-Border Payments

XRP, driven by Ripple, focuses on the cross-border payment sector, with fast transaction speeds and low costs, already adopted by hundreds of financial institutions worldwide. Although its lawsuit with the SEC has sparked controversy, the victory in 2023 has vindicated it. Trump's choice of XRP may be due to its role as a bridge connecting traditional finance and the crypto world. On March 3, after a significant price surge, XRP's FDV reached $272.6 billion, surpassing Ethereum for the first time.

In February this year, Trump shared an article related to XRP on Truth Social. The article, published by CoinDesk in January, revealed that Ripple CEO Brad Garlinghouse noted an increase in Ripple's business cooperation and recruitment in the U.S. after Trump won the election last November.

In the same month, Nasdaq submitted a proposed rule change to the SEC aimed at listing and trading CoinShares XRP ETF ("Trust") shares. B2BINPAY CEO Arthur Azizov stated, "The XRP ETF is very likely to be launched within the year, depending on the speed of resolution of the legal disputes with the SEC."

Cardano (ADA): An Academically Driven Potential Stock

Cardano is known for its development driven by academic research. Although ADA's market cap is not as high as the previous ones, its applications in Africa and Southeast Asia are noteworthy. For example, Cardano has collaborated with the Ethiopian government to provide blockchain identity verification for 5 million students, showcasing the potential for inclusive finance. Trump's inclusion of it may aim to demonstrate America's support for global inclusive finance while adding diversity and innovation to the reserves. Currently, ADA ranks 8th in market cap, exceeding $37 billion.

At the end of last year, Robinhood US re-listed ADA and XRP.

Conclusion

Among numerous cryptocurrencies, why were popular coins like Dogecoin and BNB excluded? Although DOGE has the backing of Musk, its speculative nature is too strong, lacking substantial technical support, making it difficult to bear the seriousness of a national strategic reserve. While BNB plays a crucial role in the Binance ecosystem, its centralization tendency contradicts the decentralized spirit of cryptocurrencies and relies too heavily on a single platform. Additionally, technical coins like Avalanche, despite their potential, still lag behind the five selected in market influence and maturity.

Trump's selection of BTC, ETH, SOL, XRP, and ADA for the strategic reserve reflects his team's profound understanding of the diversification of cryptocurrencies. These five coins each have unique characteristics, covering key areas such as value storage, smart contracts, high-performance blockchains, financial bridges, and future potential, collectively forming a balanced cryptocurrency asset portfolio. This move could not only reshape America's position in the global digital economy but also set a confidence benchmark for the crypto industry.

In the future, as the reserve plan progresses, the status of these five cryptocurrencies may further solidify. For the unselected coins, this may serve as a signal to accelerate innovation. Regardless, Trump's choice has opened a new door for the crypto world.