Bitcoin bounces above S$125,000 after Trump announces US crypto reserve

The price of Bitcoin (BTC) surged more than 9 per cent past US$93,000 (S$125,000) on early Monday morning at about 2am (Singapore time) after U.S. president Donald Trump announced a crypto strategic reserve for the world's biggest economy.

His initial announcement on the Truth Social platform revealed that the reserve will hold XRP, Solana (SOL), and Cardano (ADA) cryptocurrencies.

He later added that bitcoin and ethereum (ETH) would also be part of it.

Jumps

XRP jumped more than 31 per cent in the last 24 hours to trade at around US$2.80 (S$3.80), while Cardano price crossed above US$1 (S$1.35), and Solana above US$160 (S$216), both rising more than 20 per cent.

Ethereum has increased by more than 15 per cent and is trading at US$2,444 (S$3,300).

Crypto-linked stocks, such as Strategy (MSTR), Coinbase (COIN), Robinhood (HOOD) have all gone up overnight.

What it means

Trump’s announcement on Sunday (U.S. time) builds on an executive order he issued on Jan. 23.

He had directed his administration to create a “working group” to propose a regulatory framework on digital assets.

This includes evaluating a “national digital asset stockpile”.

US governments holding seized crypto

Trump’s January executive order suggests the reserve would be “potentially derived” from cryptocurrency the federal government has seized “through its law enforcement efforts”.

The U.S. currently holds around 200,000 tokens, worth about US$19 billion, according to Reuters citing the New York Times.

However, beyond this, it is still unclear what a crypto stockpile would look like.

The U.S. government has previously periodically sold off its crypto holdings, The Washington Post reported.

This has historically driven down crypto prices.

A crypto stockpile in effect could prevent that from happening.

It remains unclear if Trump will also try to acquire significant amounts of new cryptocurrency to stock the reserves, which would likely require congressional approval, NYT reported.

Potential plan

The most concrete bitcoin reserve proposal comes from pro-crypto Republican Senator Cynthia Lummis, who personally holds five bitcoins.

In July 2024 she introduced a bill to create a reserve operated by the Treasury.

The Treasury would create a programme to buy 200,000 bitcoins annually for five years until the stockpile hits one million tokens, the bill envisaged.

This would represent about 5 per cent of the total global supply of around 21 million bitcoin.

The Treasury would fund the purchases with profits on Federal Reserve banks' deposits and gold holdings.

The bitcoin reserve would subsequently be maintained for a minimum of 20 years.

Top photos via Coinhako & Unsplash