Stockpiling Crypto

It was an odd time to make such a major announcement.

On Sunday afternoon, President Trump posted on social media his initiative to move forward with establishing a “crypto strategic reserve” for the U.S. government.

Source: Truth Social

It wasn’t the announcement itself that took the markets by storm.

After all, in President Trump’s executive order issued on January 23, 2025, Strengthening American Leadership in Digital Financial Technology, it was stated clearly that:

The Working Group shall evaluate the potential creation and maintenance of a national digital asset stockpile and propose criteria for establishing such a stockpile, potentially derived from cryptocurrencies lawfully seized by the Federal Government through its law enforcement efforts.

What came as a surprise is how fast this has all happened. And President Trump went so far as to name the digital assets to be added to the crypto strategic reserve: Ripple (XRP), Solana (SOL), and Cardano (ADA).

Strategic Assets

Ripple, Solana, and Cardano are the third, sixth, and eighth-largest cryptocurrencies by market capitalization…

Source: CoinMarketCap

After Bitcoin and Ethereum, the three choices are logical in terms of each project’s importance, scale, and liquidity in the blockchain industry. While the rationale for these selections hasn’t been made public, we have a good understanding as to why they were selected.

• Ripple (XRP) is a blockchain-based payments protocol that specializes in cross-border transactions and working with traditional financial institutions, including central banks around the world. It is not decentralized, and that is likely the point. Having a centralized corporate enterprise to engage with is desirable for governments and financial institutions. Ripple is working with more than 300 financial institutions around the globe in more than 70 countries, can settle transactions in seconds at a small fraction of the cost of using SWIFT, and it recently launched a U.S. dollar stablecoin. Legislation for U.S. dollar stablecoins, and use of, is a priority for the administration.
• Solana (SOL) is a layer one blockchain that is designed for speed and cost. Solana enables settlement times of less than a second and low-cost transactions, as well as supporting smart contract functionality. Solana’s high throughput and low cost are vital to the blockchain industry for processing large volumes of transactions for the equivalent of fractions of a penny. This functionality is important for transactions that are of low economic value but are high in demand and utilization.
• Cardano (ADA) is a smart contract-enabled layer one blockchain that uses a proof-of-stake consensus technology. The Cardano blockchain leans heavily into security and governance at the expense of throughput and cost. While it is more expensive to execute smart contracts on Cardano than Solana, it is still much less expensive than using Ethereum. This combination of security, governance, and lower cost makes Cardano suitable for use in government and enterprise applications.

Tether (USDT) and USDC (USDC) are both U.S.-dollar-backed stablecoins, so neither made sense for the reserve…

Binance (BNB) has had deep ties to China, so there was no way that would make the reserve…

And Dogecoin (DOGE) – no relation at all to the Department of Government Efficiency – is “just” a meme coin.

Naturally, the impact on the prices of the three cryptocurrencies named was immediate.

Ripple popped more than 32%.

One-Week Chart of Ripple (XRP) | Source: Messari

Solana jumped 27%.

One-Week chart of Solana (SOL) | Source: Messari

And Cardano rocketed an impressive 76%.

One-Week Chart of Cardano (ADA) | Source: Messari

The market response was crazy, but not surprising… considering what had been announced – specifically naming the three digital assets.

But there was a moment of panic when the news came out…

Getting Left Behind?

XRP, SOL, and ADA were named…

But what about the most obvious choices of all? What about Bitcoin (BTC) and Ethereum (ETH)? They are the most obvious digital assets for a crypto reserve, aren’t they?

Apparently yes – so obvious that it goes without saying that Bitcoin and Ethereum would be included.

That point was made clear with a follow-up post on Truth Social, also suggesting that other cryptocurrencies would be added to the strategic reserve.

Source: Truth Social

The market was quick to reflect the bullish sentiment in the price of Ethereum, up about 15%.

One-Week Chart of Ethereum (ETH) | Source: Messari

And Bitcoin was also happy to show signs of life, with a robust 11% move higher after the news.

One-Week Chart of Bitcoin (BTC) | Source: Messari

Naturally, all the named digital assets have pulled back varying degrees since the news broke.

There are a lot more details I’m sure need to be fleshed out by the Working Group on Digital Asset Markets, which is chaired by the Special Advisor for Artificial Intelligence (AI) and Crypto – venture capitalist David Sacks.

Cooperation with the FBI, the U.S. Treasury, and, of course, Congress will be required to implement the crypto strategic reserve…

But the sheer fact that this is being addressed and supported is incredibly bullish for the industry.

It’s all moving quickly too…

The Intersection of Blockchain and AI

Over the weekend, we learned that Sacks and Bo Hines will be hosting the first-ever crypto summit at the White House with a small group of blockchain industry executives on Friday, March 7.

And just this morning, Representatives Tom Emmer and Ritchie Torres announced they are launching a new Congressional Crypto Caucus designed to support digital asset legislation in Congress, promote innovation in blockchain technology, and mobilize support for digital assets.

These initiatives aren’t just for show, either.

The change in stance at the SEC has been nothing short of remarkable. The shift has gone from raw, unbridled antagonism of the industry to outright, proactive support and engagement.

And as a sign to the industry, longstanding cases brought on by the prior administration through the SEC against MetaMask, Consensys, Coinbase, Uniswap, Gemini, Opensea, and most recently Kraken have been dropped. I fully expect the same will happen with Ripple any day now.

These latest developments are remarkably bullish for high-quality digital assets in growth mode. And herein lies the opportunity for investors…

After years of repressive regulation, driving development and progress offshore, the next 12-24 months will finally be free to unleash the innovation that has been happening with blockchain technology.

Blockchain technology is fundamentally the new protocol for the next generation of the internet and financial services. Aside from the technological advancements, blockchain technology incorporates economic value, a digital asset, into its protocol design.

This is one of the highest growth sectors in high-tech, which is why I feel it’s so important for us to provide our subscribers with research about digital assets and cryptocurrencies. This is a very distinct asset class that requires a different kind of analysis compared to publicly traded equities.

When evaluating investment opportunities in cryptocurrencies, it’s important to understand:

• What’s the utility of the blockchain and what problem (s) is it solving?
• What kind of adoption has the blockchain seen both by developers and end users?
• How does the blockchain manage the tradeoffs between security, scalability, and decentralization?
• Who’s behind the project and what kind of governance is in place?
• What’s the monetary policy of the blockchain?
• What are the regulatory considerations?
• How will the blockchain project accelerate network effects?
• Are there any red flags?

That’s just to name a few of the important considerations.

Given the intersections with financial markets and securities regulations, it’s no surprise we have a lot of volatility right now. But I can’t imagine a more pro-innovation, bullish set up for an industry than what we are seeing right now.

And it’s not a coincidence that Sacks was given responsibility for both AI and crypto…

The two technologies are both experiencing an explosion of innovation right now, that will lead to the most incredible productivity boom in history.

And artificial intelligence, specifically agentic AI, is a natural fit for a web3 world running on blockchain technology.

Blockchain technology empowers an agentic AI to manage digital wallets, provision services, and generate economic activity in a fully autonomous (and transparent) manner.

Jeff