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Why Trump Is Right on a Digital Currency Reserve

President Trump has proposed the Federal government hold digital currencies, and some media and political people have pushed back with dire warnings of the impact on the U.S. dollar. But the reality of Trump’s proposal differs sharply from that painted by Trump’s hysteric critics. BTC is not a threat to the U.S. dollar and U.S. government holding of BTC or any other digital currencies is not an endorsement.
The U.S. dollar still dominates the world, representing nearly 60% of all currency held by central banks, as of Dec. 2024, according to the IMF. Unlike fiat currencies, bitcoin and other digital currencies are not governed by any central bank. So, there is no way to ever have an adversarial relationship with the issuer of BTC – unlike the issuer of Chinese yuan or Russian rubles.
Most of the forex reserves held by the U.S. are euros and Chinese yuan. But no one is calling for the U.S. to stop holding euros. That’s because holding a currency in reserve is not an endorsement of that currency. Countries hold forex reserves primarily for liquidity purposes – mainly to facilitate foreign trade with counterparties using the other currency. And, since BTC and ETH are the largest digital currencies, the most liquid and the largest volume of USD transactions, it makes sense for the U.S. to hold those currencies.
Most importantly, the U.S. dollar dwarfs BTC in size. USD value is more than 1,150x larger than BTC at $2,300 billion USD versus about $2 billion for BTC. And BTC ranked as only the 16th largest foreign currency in the world, measured by USD, as of the start of 2024. So, if the U.S. held 50,000 BTC, it would represent less than 5% of its foreign currency reserve holdings.
Further, the U.S. has extensive reserves of gold and silver, neither of which is used any longer as currency by any major country. There does not seem to be any risk these U.S. holdings will be deemed to be an endorsement of gold as a currency, though gold is held by the U.S., in part, because it is a good store-of-value.
Critics of digital currencies argue they have no inherent value – but that is like saying a Picasso has no inherent value, aside from the inherent value of dried paint and an old canvas. What a Picasso has is social value and scarcity value – the same sources of value as BTC. Bitcoin’s social value derives from its objective to serve a role outside control of governments. Its scarcity value acts to support BTC’s price and enhances its utility as a store-of-value.
There’s another reason for the U.S. to hold virtual currencies. They represent a major leap in financial technology and it is in the paramount interest of the United States to be at the forefront of fintech. It’s not only to make the U.S. the most efficient financial player, but also to be best prepared for changes that may come in the future. Blockchain technology has proven to have many uses beyond digital currencies, including reducing transaction costs thereby benefiting all consumers.
So, not only is Trump’s proposal based on solid economics and consistent with holdings of other foreign currencies, but, also, it gives a boost to the fintech sector. It is smart and forward-looking. Sounds like a double win for the U.S.
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Coinbase Outpaces S&P 500 With 43% June Rise as Stablecoin Narrative Grows: CNBC

Shares of Nasdaq-listed cryptocurrency exchange Coinbase (COIN) rose 43% this month, making the firm the top performer in the S&P 500 since it joined the index at the end of last month.
June’s run is already the stock’s best since November and caps three straight monthly gains. Coinbase’s shares reached their highest level since their public debut.
COIN hit a $382 high this week before enduring a slight correction, ending the week at $353 and seeing a slight 0.7% drop in after-hours trading to $351.
The wider S&P 500 index rose roughly 5% in June as geopolitical tensions eased.
Washington’s progress on the GENIUS Act, Congress’s first rulebook for dollar-pegged stablecoins, helped shift investor focus from trading fees to stablecoin revenue.
The bill brightened the outlook for Circle, whose shares hit a record high and saw its market cap near that of Coinbase this week.
Coinbase keeps all yield on USDC balances held on its platform and nearly half of other USDC income, equal to about 99 percent of Circle’s revenue, giving shareholders indirect exposure at no added cost, CNBC reported Friday, citing analysts including Citizens’ head of financial technology research Devin Ryan.
Trading, however, remains subdued. Average daily volume on Coinbase has drifted lower since April.
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Robinhood Launches Micro Bitcoin, Solana and XRP Futures Contracts

Robinhood (HOOD) has introduced micro futures on bitcoin (BTC), solana (SOL) and XRP in the United States., expanding its existing crypto futures offering for its nearly 26 million funded accounts.
Micro contracts need far less collateral than full-size futures, letting traders take directional positions while committing a smaller slice of capital.
The contracts offer traders more flexibility to bet on a cryptocurrency’s future price direction or hedge current positions given their smaller size.
The launch rounds out a futures suite that began with BTC and ETH in January. It also comes weeks after the firm closed its $200 million purchase of Bitstamp and finalized a $179 million deal for Canada’s WonderFi.
Robinhood’s data shows that crypto notional volumes have exploded upward over time, reaching $11.7 billion in May. The figure marks a 36% rise month-over-month, and a 65% growth year-over-year.
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Why is XRP Up Today? Trio of Catalysts Sees Token Outperform Wider Crypto Market

XRP climbed 5.5% to $2.19 in the last 24 hours after a trio of catalysts converged to help the cryptocurrency outperform the wider cryptocurrency market.
One of the catalysts was launch of XRP micro futures on Robinhood. The contracts offer traders more flexibility to bet on the cryptocurrency’s future price direction or hedge current positions given their smaller size.
Regulatory fog also thinned. On Friday, Ripple withdrew its cross-appeal in its long-running U.S. Securities and Exchange Commission (SEC) lawsuit. The SEC sued Ripple back in 2020 over its XRP sales, alleging these violated securities laws. The SEC is expected to drop its own appeal, leaving last year’s ruling, ordering Ripple to pay a $125 million civil penalty to the SEC, intact. The move could lift a lid that had kept some investors on the sidelines.
On-chain data rounded out the bullish setup. The XRP Ledger logged over a 1.1 million active addresses over the past week according to crypto analyst Ali Martinez, who cited Glassnode data.
XRP’s rise saw it outperform the wider crypto market, with the broader CoinDesk 20 (CD20) index rising 1.7% in the last 24 hours.
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