Debate Sparks Over Trump’s US Crypto Reserve Plan

President Donald Trump’s plan to establish a US crypto reserve has sparked significant debate, particularly over which digital assets should back the reserve. Many in the crypto industry argue that Bitcoin (BTC) should be the sole reserve asset, as it offers clarity and simplicity. However, Trump’s proposal includes a mix of digital assets, such as Ethereum (ETH), XRP (XRP), Solana (SOL), Cardano (ADA), and others. This move has led to a divided response, with critics questioning the choice to include altcoins in the reserve.

The announcement of this reserve, coming on the heels of Trump’s executive order directing the Presidential Working Group to establish it, has already triggered a rally in the selected cryptocurrencies. However, this has not been without controversy. Coinbase CEO Brian Armstrong suggested that Bitcoin alone would be the best option for the reserve, viewing it as a clear successor to gold. He proposed that if diversification is necessary, a market-cap-weighted index of crypto assets could be used to avoid any bias. Armstrong emphasized that a Bitcoin-only reserve would be the simplest and most straightforward option.

Investor Fred Krueger also supports a market-cap-weighted approach for the reserve, proposing a breakdown that includes Bitcoin at 75%, Ethereum at 12.4%, XRP at 5.7%, Solana at 3.1%, and smaller allocations for other altcoins such as Dogecoin (DOGE) and Cardano (ADA). On the other hand, many in the crypto space are disappointed by Trump’s decision to include altcoins, particularly XRP. Jeff Park, head of Alpha Strategies at Bitwise, criticized Trump for not focusing solely on Bitcoin, arguing that the inclusion of altcoins could create a perception of political favoritism, even if that’s not the case.

Some voices, like long-time Bitcoin skeptic Peter Schiff, acknowledged the logic behind a Bitcoin-only reserve, comparing Bitcoin to “digital gold.” However, Schiff expressed confusion over the inclusion of XRP, questioning its relevance in the reserve. Alex Xu, a research partner at Mint Ventures, took a more political view, accusing Trump of making a move that benefitted projects that supported him financially. Xu also noted the narrow Republican majority in the House, suggesting that legislation to include altcoins like XRP and ADA in national reserves may not pass. He argued that the most likely route for Trump to acquire these assets would be through a sovereign wealth fund controlled by the Treasury, bypassing congressional approval.

Arthur Hayes, former CEO of BitMEX, dismissed the idea of a US crypto reserve, calling it empty rhetoric. He argued that without congressional approval to borrow funds or revalue gold, the US government wouldn’t have the resources to purchase Bitcoin or other cryptocurrencies. Despite these doubts, the proposal has created a buzz, as industry leaders, investors, and politicians continue to debate the implications of such a move for the future of digital assets in the US.