SINGAPORE (Reuters) – Bitcoin experienced a significant increase in trading value on Monday, rising by one-fifth from the lows observed the previous week. This surge in value was also seen in several other cryptocurrencies that were mentioned by U.S. President Donald Trump to be part of a new U.S. strategic reserve. Trump disclosed in a post on Truth Social that his executive order from January regarding digital assets would establish a reserve consisting of various currencies, including bitcoin, ether, XRP, solana, and cardano. The revelation of these names came as a surprise to many in the industry.
Stressing that bitcoin and ether would form the core of this reserve, Trump’s announcement on Sunday led to a more than 20% increase in the value of the world’s largest cryptocurrency from the lows it had reached in November. This positive development marked a shift in sentiment for bitcoin, which had been declining since mid-January due to concerns that Trump might not fulfill promises to ease regulations. The latest trading price for bitcoin stood at around $94,154, up significantly from Friday’s figure of $78,273.
Over the weekend, ether also saw a notable rise of one-fifth, reaching a value of $2,482. Similarly, XRP showed an increase of 38%, solana surged by 20%, and cardano witnessed a remarkable 78% rise in its value. Chris Weston, head of research at Australian online broker Pepperstone, described Trump’s post announcing the inclusion of these cryptocurrencies in the reserve as a “positive shock” that injected much-needed optimism into the crypto market, which had been facing a downward trend.
Weston further speculated that the rally might continue into the upcoming White House Crypto Summit hosted by Trump on Friday. However, he cautioned that the prevailing bearish sentiment in other markets could potentially impact this upward trend. Despite a positive closure on Wall Street the previous Friday, concerns lingered due to the recent sell-off in major technology companies like Nvidia, which has cast doubt on bitcoin’s role as a tech proxy.
Bitcoin experienced a decline of over 17% in February, marking its most substantial monthly percentage drop since June 2022 and losing more than a third of its value since hitting a peak of $105,000 in early January. The initial rally post-Trump’s election was fueled by hopes that the crypto-friendly president would establish a strategic bitcoin fund and reverse the stringent regulations imposed by the previous Biden administration.
However, there has been a lack of concrete developments in this regard beyond the appointment of crypto-friendly officials at the beginning of Trump’s term. While the announcement of the inclusion of cryptocurrencies in the reserve has driven prices up, it also raised some concerns, as pointed out by IG market analyst Tony Sycamore. Sycamore highlighted the possibility that the funding for purchasing cryptocurrencies in the reserve could originate from U.S. taxpayers or from assets seized in law enforcement actions.
