Bitcoin drops 4.7% Amidst Concerns Over Trump’s Strategic Reserve
Bitcoin drops 4.7% Amidst Concerns Over Trump’s Strategic ReserveBy Ruchi Sharma
President Donald Trump has signed an executive order on 7th March establishing a “Strategic Bitcoin Reserve” and a digital asset stockpile, primarily funded by cryptocurrencies seized through criminal and civil proceedings. The reserve includes Bitcoin (BTC) whereas Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA) are added to the digital asset stockpile.
President Trump Signs Executive Order For U.S. Bitcoin Reserve
The announcement has led to immediate market reactions with Bitcoin witnessing a decline of approximately 4.7% to trade around $86,000.
ETH Holds Steady While XRP, SOL, ADA Face Volatility
Governments and institutions may decide to keep certain Crypto assets in reserve to:
- Diversify National Reserves & Gain exposure to emerging cryptocurrency markets
- Gain Strategic Control Over Digital Assets Amidst Growing Institutional Adoption
- Influence development & regulation of the sector benefiting from enhanced security & tech-innovation
- Leverage High ETF-driven demand
- Make possible high gains vis a vis traditional assets despite their volatile nature
Now Let’s try to understand why these 4 crypto coins Eth, Xrp, Sol, and Ada are selected by President Trump for the digital asset stockpile and reasons for the Bitcoin reserve.
Bitcoin:
Bitcoin, the first and the largest cryptocurrency, was created by an unidentified person who went by the name of Satoshi Nakamoto and began circulating in 2009.
Bitcoin’s market strength has several positives.
Its current market price as on 8th March is around $86,000, with a market capitalization of $1.7 trillion, well over 50% of the $3 trillion global crypto market.
Bitcoin has a fixed supply of 21 million coins with its circulation cut to half every 4 years with the Halving event.
Over 165 entities hold bitcoin including institutional investors, public and private companies, and even governments as per data from Bitcoin treasuries.
There are currently 11 SEC-approved Bitcoin ETFs with a total assets under management (AUM) of $102 billion.
In the U.S., 18 states have pending crypto reserve bills, while Arizona and Utah are near final approval.
Ethereum:
Founded in 2013 by Vitalik Buterin, Ethereum is the second-largest cryptocurrency.
Its current price as on 8th March is $2,200 and its market cap is $265 billion.
The reason why Ethereum is often preferred is due to its unique Smart contract functionality enabling dApps, DeFi, NFTs, and advanced financial tools.
Moreover, the Merge upgrade transitioned Ethereum to Proof-of-Stake (PoS), cutting energy use by 99.95% and making ETH deflationary, significantly reduced the creation of new ETH, making it scarcer over time. A large user base and strong adoption enhance Ethereum’s liquidity and network effects.
No wonder, 8 SEC-approved Ethereum ETFs manage $9B in assets.
XRP:
Created by the blockchain Ripple, XRP is the third-largest cryptocurrency.
Its current price is $2.40 and its market cap is $140B.
Its strength is its fast & low-cost transactions that make XRP ideal for a government-backed digital reserve. Strong banking integration sets XRP apart from independent cryptocurrencies.
Its transaction speed is 2-3 seconds vs. Bitcoin’s 10 minutes, enabling efficient cross-border payments.
As a result, RippleNet has 300+ financial institutions connected worldwide.
The SEC has already acknowledged 6 out of the 7 ETF applications filed for XRP till now.
Solana (SOL):
SOL is the native coin of the Solana blockchain and is widely used for meme coins, including President Trump’s cryptocurrency launched in January.
Sol is the 6th largest cryptocurrency with a market cap of $72B, currently trading around $142 and its circulating supply is 507M SOL.
It is exceptionally fast and amazingly scalable, processing 3,000-4,000 transactions per second at the cost of an average fee of $0.00025.
It is preferred for meme coins, NFTs, and crypto projects due to its low fees & high performance.
Sol is ideal for DeFi, NFTs, and fast transactions, backed by a large developer community.
In view of all these factors, five asset managers—Grayscale, VanEck, 21Shares, Bitwise, and Canary Capital—have filed applications for Solana ETFs.
Cardano (ADA):
ADA runs on the Cardano blockchain, founded in 2015 by Charles Hoskinson, the co-founder of Ethereum.
ADA is the 8th largest cryptocurrency with a market cap of $33B and is currently trading around $0.90.
Cardano processes 1,000+ TPS, with a $0.13 fee and 20-second settlement time.
It supports financial inclusion, expanding access to banking in underserved regions.
Asset manager BlackRock and 21Shares have filed an application for a Cardano ETF.
So, as things stand now, XRP, Solana, Ethereum, and Cardano are added to the U.S. digital asset stockpile, and not the Strategic Bitcoin Reserve. No new purchases will be made by the U.S. government, which primarily remains the concern of investors desiring a robust cryptocurrency market.
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