The prices of major cryptocurrencies surged on Sunday after US President Donald Trump announced his support for a new strategic reserve of digital assets, naming Bitcoin, Ethereum, XRP, Solana, and Cardano as key components.

Trump, in a post on Truth Social, said he had signed an order directing the formation of a Crypto Strategic Reserve, which he claimed would help position the US as "the Crypto Capital of the World." The move led to an immediate rally in the crypto market, with the five named coins witnessing sharp price jumps.

The former president had previously been a critic of digital currencies, once calling Bitcoin a "scam" in a 2021 interview.

However, his stance has shifted significantly in recent months, with both Trump and his wife, Melania Trump, launching their own digital tokens.

Market reaction, uncertainty over implementation

The announcement caused XRP, Solana, and Cardano to rise by as much as 62% within hours, while Bitcoin and Ethereum gained more than 10% each. The total cryptocurrency market added nearly $300 billion in value, according to data from CoinGecko.

Bitcoin, the world's largest cryptocurrency, was trading at $94,164 on Sunday afternoon, while Ethereum reached $2,516.

Despite the market optimism, it remains unclear how the proposed reserve would function. The executive order signed in January tasked a presidential working group with evaluating the creation of a national stockpile of digital assets, potentially utilizing cryptocurrencies seized by US law enforcement agencies. However, experts remain divided on whether such a reserve can be formed without congressional approval.

James Butterfill, head of research at CoinShares, noted that the inclusion of assets beyond Bitcoin was surprising. "Unlike Bitcoin, which has often been viewed as a digital equivalent to gold, these other assets are more akin to technology investments," he said.

Federico Brokate, head of US business at 21Shares, said the move could mark a shift in government policy towards digital assets. "This signals a willingness to actively participate in the crypto economy, which may accelerate institutional adoption and provide greater regulatory clarity," he said.

Trump’s pro-crypto stance and policy changes

Trump has actively sought the support of the crypto industry during his 2024 campaign, contrasting sharply with his predecessor, Joe Biden, whose administration cracked down on the sector due to concerns over fraud and money laundering.

Under Biden, the Securities and Exchange Commission (SEC) pursued regulatory actions against major cryptocurrency firms, including a lawsuit against Coinbase, the largest crypto exchange in the US. Since taking office, Trump has reversed some of these policies, with the SEC withdrawing investigations into several crypto companies.

The president is set to host the first-ever White House Crypto Summit on Friday, where further details about the strategic reserve are expected to be revealed.

Analysts see potential for further growth

While the announcement has sparked a new rally in the crypto market, analysts caution that sustained gains will depend on further regulatory clarity and macroeconomic factors.

Geoff Kendrick, an analyst at Standard Chartered, has projected that Bitcoin could reach $500,000 before Trump leaves office, significantly surpassing its current record high of $109,071.

Regulatory filings suggest that hedge funds remain the dominant buyers of digital assets, though interest from banks and sovereign wealth funds is increasing. Quarterly reports also indicate that asset managers have increased their exposure to Bitcoin-linked ETFs.

Analysts are also debating whether the reserve could be established through the US Treasury’s Exchange Stabilization Fund, which is traditionally used to manage foreign currency reserves, or if it would require formal congressional approval.

Future of Crypto in US Policy
Trump’s latest move represents a marked departure from past skepticism towards cryptocurrencies. While his backing of a Crypto Strategic Reserve has driven up market confidence, industry experts are awaiting more details on its feasibility and regulatory implications.