Bitcoin and other cryptocurrencies have shot up in value after Donald Trump said he wanted to make them an official part of governent policy.
It comes after a dismal slump for crypto following the US election, when anticipated policies in its favour did not immediately materialise.
The crashing graph was rapidly sent the other way when the president said he would create a US ‘Crypto Reserve’ to ‘elevate this critical industry after years of corrupt attacks by the Biden administration’.
He said he had signed an executive order to create a government stockpile and make America the ‘crypto capital of the world’.
Which crypto coins will be part of this strategic reserve?
Trump singled out five cryptocurrencies in particular when announcing the move on his Truth Social site, though this was not an exclusive list.
He said that the Crypto Strategic Reserve would include XRP (Ripple), SOL (Solana), and ADA (Cardano).
In a follow-up post, he added: ‘And, obviously, BTC and ETH, as other valuable Cryptocurrencies, will be the heart of the Reserve. I also love Bitcoin and Ethereum!’
A turnaround for the markets
Bitcoin had fallen below £63,000 on Friday morning, as most of the gains made since Donald Trump won the US election in November were wiped out.
It had peaked at about £86,000 per Bitcoin when Trump was sworn in in January.
But since then, many investors had been disappointed by a perceived lack of action on his promises.
Kathleen Brooks, an analyst at finance firm XTB, said: ‘We think that a lot of money went into crypto on the hope that Donald Trump would institutionalise crypto when he got to office.
‘However, comments about crypto since Mr Trump took over the presidency have been conspicuous by their absence. This could be why investors are flooding to the exits.’
One Bitcoin has now recovered in price to stand at £73,265.
What has Trump said about crypto in the past?
He courted crypto investors in his election campaign, drawing a distinction with the stricter approach taken by rival Joe Biden who had concerns about fraud and money laundering.
Speaking at the Bitcoin 2024 Conference in Nashville in July last year in the run-up to the election, he said: ‘If crypto is going to define the future, I want it mined, minted and made in the USA. It’s going to be; it’s not going to be made anywhere else.
‘And if Bitcoin is going to the Moon as we say – it’s going to the Moon! – I want America to be the nation that leads the way. And that’s what’s going to happen.’
A fan of crypto, Trump and his wife Melania even created their own coins, $TRUMP and $MELANIA to celebrate their return to the White House (though they added a disclaimer that they are an ‘expression of support’ rather than an investment opporunity).
This all represents a significant shift since Trump’s first presidency when he said: ‘I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.
‘Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity’
In 2021, Trump said Bitcoin ‘just seems like a scam’, adding: ‘I don’t like it because it’s another currency competing against the dollar.’
Now he’s dubbed himself ‘The Crypto President’, and was the first presidential candidate to accept cryptocurrency donations.
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