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4 Unanswered Questions About Trump’s Crypto Reserve

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At the Bitcoin Conference in Nashville in July, Donald Trump pledged to create a «strategic national bitcoin reserve.»

By Sunday morning March 2, that reserve also included ether (ETH), XRP, Solana (SOL) and Cardano (ADA) alongside bitcoin (BTC).

Trump’s message on Truth Social said his presidential working group was moving forward on creating the larger-scope crypto reserve, igniting a torrent of feedback from across the crypto community.

Many complained that the reserve isn’t just sticking to bitcoin. Others asked if the U.S. should be stockpiling tokens like XRP and Cardano at all. Others wondered what might have changed Trump’s mind.

Trump said he wanted to make the U.S. the “crypto capital of the world” and his timing seemed aimed at retail traders. “I love the genius of announcing a strategic reserve on a Sunday, when traditional markets are closed and Wall Street sleeps. For the first time, retail investors win,” tweeted Trump’s son, Eric Trump, Sunday night.

The assets’ prices rose almost immediately, with ADA benefitting in particular. Still, there’s a lot we don’t know about the “Crypto Strategic Reserve.”

Trump’s Sunday morning message was the first time the administration had said there would be five assets in the portfolio. Beyond that, details are sketchy. Here are some big questions.

1. Is he serious? 

The U.S. already owns more than 200,000 BTC it claimed through seizures. Experts say this could be the basis for a National Reserve without Congressional approval. But a multi-coin reserve would surely require Congress to pass legislation.

Wyoming Senator Cynthia Lummis has proposed legislation that would see the U.S. buy $20 billion in the first year, and 20,000 more BTC in each of the following four years to take the U.S. stockpile to one million BTC. Lummis’s views on the now-expanded multi-coin reserve are unknown. She was planning to meet with industry leaders to discuss the matter on March 11. Will she now propose different legislation?

The other, subsidiary question is how the U.S. might pay for the expanded portfolio. Crypto is publicly traded and has a public price. It’s not clear from Trump’s message whether his administration will seek a new spending appropriation. Could the U.S. sell gold to buy crypto? We don’t know.

2. Why Include Solana, XRP and Cardano? Will There Be Others?

As many on X have noted, there are logical reasons to include bitcoin in a strategic reserve. “We’re talking about a reserve, and Bitcoin is the undisputed store of value for the digital age,” noted Hunter Horsely, the CEO of Bitwise. Bitcoin is “digital gold” and BTC’s “dominance” of the market is still north of 60%. BTC is the first asset any holder holds.

It’s harder to make a straightforward case for the other coins. For example, Cardano, with a dominance of 1.1%, is best known as an environment to build decentralized applications (dApps). It doesn’t have ETFs like bitcoin and ether and isn’t accepted by TradFi to nearly the same extent.

The five coins are being chosen for two different reasons. BTC and ETH are fully decentralized. Solana, XRP and Cardano are Made in America, and Trump may be including them to promote the U.S. crypto industry. Trump’s announcement seemed to leave open the possibility that the reserve could include other coins in the future.

3. Will the States Follow Suit?

CoinDesk’s Jesse Hamilton wrote recently that up to 22 states are considering creating their own crypto reserves, mostly in bitcoin. Will they now consider a wider range of assets?

4. Will Crypto Support It? 

The reaction to Trump’s announcement across professional crypto was tepid-to-critical. Trump announced the reserve at Nashville aiming to please his audience. But today it’s not clear that the crypto industry is 100% behind his plan to bring the reserve about. If the measure gets pushback in Congress, the administration will need industry support, so that might be a worry for its backers. Certainly, Polymaket bettors are skeptical that the reserve will come about soon.

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Bitcoin Treasury Corp Boosts Holdings to 771 BTC, Plans Lending After $51M Buy

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Bitcoin Treasury Corporation, a Canadian firm focused on bitcoin-related services, has wrapped up the first leg of its bitcoin buying campaign, adding 478.57 bitcoin (BTC) for CAD $70 million ($51 million) and boosting its total holdings to 771.37 BTC.

The accumulation works out to roughly 0.0000634 BTC per fully diluted share, the company said in a Friday press release. The Toronto-based firm plans to lend part of its BTC treasury to trading desks and other counterparties that need ready access to the cryptocurrency.

The approach mirrors that of numerous other companies adopting bitcoin as a treasury reserve asset.

Publicly-traded companies now hold a total of 841,715 BTC worth over $90 billion, according to Bitcointreasuries data, while private firms are estimated to hold 290,878 BTC worth over $31 billion.

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Ripple to Drop Cross-Appeal Against SEC, Ending Years-Long Legal Battle With SEC

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The years-long legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) appears to have finally come to an end, after Ripple Labs CEO Brad Garlinghouse announced Friday that the company plans to drop its cross-appeal in the case.

“Ripple is dropping our cross appeal, and the SEC is expected to drop their appeal, as they’ve previously said,” Garlinghouse wrote on X. “We’re closing this chapter once and for all, and focusing on what’s most important – building the Internet of Value. Lock in.”

XRP climbed a modest 1.4% on the news.

The decision comes just a day after U.S. District Judge Analisa Torres of the Southern District of New York (SDNY) rejected a joint request from the SEC and Ripple to approve a proposed settlement agreement that would slash Ripple’s civil penalty to $50 million and dissolve the permanent injunction against the firm. It was the latter that appeared to be the sticking point for Torres, who argued:

“Indeed, if the Court should not be concerned about Ripple violating the law, why do the parties want to eliminate the injunction that tells Ripple, ‘Follow the law’?,” Torres wrote. “When the Court imposed the injunction, it did so because it found a ‘reasonable probability’ that Ripple would continue violating federal securities laws. This has not changed, nor do the parties claim that it has.”

The joint request was the second such request slapped down by Torres, who rejected an earlier attempt in May citing both jurisdictional and procedural flaws. With the court showing no signs of budging on the terms of the settlement, Ripple’s decision to withdraw its cross-appeal ends the case by accepting the initially-imposed civil penalty of $125 million and presumably leaving the permanent injunction against the firm in place.

A spokesperson for Ripple Labs did not immediately respond to CoinDesk’s request for comment.

The SEC first sued Ripple in 2020 under then-Chair Jay Clayton, alleging that the company violated federal securities laws through its sales of XRP. After years of litigation, Torres eventually concluded in a 2023 ruling that the sales of XRP to retail traders on public exchanges did not constitute securities transactions, but found that XRP sales to institutional investors did, thus violating securities laws.

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Bitvavo Secures a MiCA License From the Netherlands

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Bitvavo is the latest crypto exchange to receive a Markets in Crypto Assets License from the Dutch Authority for the Financial Markets (AFM) to operate across the 30 nations in the European Economic Area.

Crypto companies have been applying for the licenses since the regulatory regime came into force in December last year. MiCA, which came into force in 2023 harmonizes rules across the European Union’s bloc of 27 nations plus Iceland, Norway and Liechtenstein.

The Netherlands also awarded licenses to four exchanges in December last year, as the rules took effect. Other exchanges like OKX, Crypto.com and Bitpanda secured a MiCA license from Malta. Kraken was awarded a license on Thursday from Ireland, Coinbase was awarded a MiCA license from Luxembourg in June and Bybit was awarded an EU license from Austria in May.

«This license provides clarity, confidence and enables Bitvavo to fulfil its ambition: to become the leading digital asset trading platform in Europe,» said Mark Nuvelstijn, CEO and co-founder of Bitvavo, in a statement.

Bitvavo, which is the largest player globally in the EUR spot market, already held registrations in France, Austria, Italy and Spain, in addition to the Netherlands, the company’s release said.

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