Just last Sunday, US President Trump stirred up the crypto market by tweeting about a proposed crypto reserve that features Solana, Ripple, and Cardano.
A U.S. Crypto Reserve will enhance this vital industry after enduring years of corrupt attacks from the Biden Administration, which is why my Executive Order on Digital Assets has instructed the Presidential Working Group to advance a Crypto Strategic Reserve that encompasses XRP, SOL, and ADA. I will ensure that the U.S. becomes the Crypto Capital of the World. We are
MAKING AMERICA GREAT AGAIN!
Shortly after, he included Ethereum and Bitcoin in the mix. As the week progressed, the market sought clarification, but the White House later clarified that he simply listed the five largest cryptocurrencies by trading volume and that a plan was forthcoming. This led to a series of announcements culminating in a much-anticipated strategy to hold cryptocurrencies already seized by the government instead of liquidating them.
On Friday, Trump finalized the executive order, prompting a ‘sell-the-news’ reaction, with Bitcoin dropping approximately $3,000 in response and reaching new lows at the time.
The order left the door open for the government to purchase Bitcoin in the future, although it could prove challenging as it would likely necessitate funding from Congress.
According to a factsheet on the White House website, the US Commerce and Treasury secretaries “are authorized to develop budget-neutral strategies for acquiring additional Bitcoin, provided that those strategies impose no incremental costs on American taxpayers.”
Bitcoin’s performance over the past two weeks
Similarly, Cardano has retraced nearly all its gains since the tweet and has dipped below the retracement low recorded on March 4. Solana is at its lowest level since late February, and XRP has fallen back below pre-tweet levels. Ethereum lost its Trump-induced gains the day after the announcement and is now threatening to reach its lowest levels since 2023.
The takeaway here is: The government provides exit liquidity rather than entry liquidity.
