Bitcoin Rallies Over 20% After Trump Announces Strategic Crypto Reserve
Bitcoin surged over 20% from last week’s lows after U.S. President Donald Trump announced plans to include cryptocurrencies like Bitcoin, Ether, XRP, Solana, and Cardano in a new strategic reserve. Trump’s declaration, made through a post on Truth Social, revealed that Bitcoin and Ether would be at the core of this reserve. This move sent Bitcoin to around $93,057, a notable rise from Friday’s $78,273, while Ether also saw a 10% increase to $2,450. Other cryptocurrencies like XRP, Solana, and Cardano experienced significant gains as well.
The rally comes as a result of renewed optimism in the market, which had previously been tempered by Trump’s lack of action on his promises to loosen cryptocurrency regulations. Bitcoin’s sharp rise helped boost market sentiment, reversing the bearish trend that had developed since mid-January. Analysts, such as Matt Simpson from City Index, believe that the rally could continue if there are no further market disruptions. However, Chris Weston from Pepperstone cautioned that broader market conditions could still weigh on sentiment.
While the announcement has brought a burst of excitement, it has also sparked concerns. Some analysts worry about the source of funding for the reserve, which could either come from U.S. taxpayers or from cryptocurrencies seized in law enforcement actions. The latter scenario would not be seen as a major market catalyst since it would simply transfer holdings rather than introducing new buying power. These uncertainties contribute to mixed reactions among investors, despite the short-term gains.
The boost in Bitcoin’s value follows a challenging period for the cryptocurrency, which had fallen over 17% in February, its steepest monthly drop since June 2022. Despite the overall decline, the news of Trump’s cryptocurrency reserve sparked renewed hope for the industry. However, analysts remain cautious about the long-term effects, as the details of how the reserve will function and its potential impact on the market remain unclear.
SOURCE: REUTERS