Bitcoin (BTC) and Ethereum (ETH) saw significant gains over the weekend, with Bitcoin rising 13% and Ethereum posting a 15.4% increase from Friday’s market close to Monday morning. These moves reflect optimism surrounding positive news, especially related to President Donald Trump’s recent posts about a potential cryptocurrency reserve.
Trump reaffirmed his administration’s plan to create a strategic reserve for cryptocurrencies, which would include Bitcoin, Ethereum, and other cryptos. This idea is not entirely new, but the recent details have brought more clarity, especially with an executive order in the works to establish a digital currency reserve. This news helped spark the price jumps in these cryptocurrencies.
However, despite the initial surge, both Bitcoin and Ethereum retreated slightly, with Bitcoin up by 6.7% and Ethereum showing a 2.7% gain by Monday afternoon.
What’s Driving the Crypto Surge?
The catalyst for the surge appears to be Trump’s commitment to creating a reserve of cryptocurrencies. This plan aligns with past campaign promises and has taken a step forward with a new executive order to develop a digital currency reserve, inspired by the U.S. gold reserve. The announcement came at a crucial time when the crypto market was struggling with uncertainty, particularly due to Trump’s trade tariffs and a recent hacker attack that resulted in the theft of $1.4 billion in Ethereum.
Crypto investors welcomed the good news as a positive sign amidst the negative developments, leading to the price jumps.
How Big Is the Proposed Crypto Reserve?
While no firm targets have been set, the idea of a government-backed cryptocurrency reserve has drawn comparisons to the U.S. gold reserves. The U.S. Treasury currently holds $682 billion in physical gold, making up about 4.5% of the global gold market. If a similar strategy were applied to cryptocurrency, it would mean an investment of approximately $132 billion in a market currently valued at $2.97 trillion. Although significant, this would be small compared to the impact institutional investors could have on the crypto market, potentially worth trillions.
Conclusion
While Trump’s proposal for a strategic cryptocurrency reserve might not be the biggest game-changer, it has fueled optimism in the market. With Bitcoin and Ethereum reacting positively to the news, crypto investors are hoping for more concrete details in the future to gauge the true impact of this government-backed initiative.
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