🔎US Crypto Reserve: What to expect
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🔎US Crypto Reserve: What to expect
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🔎US Crypto Reserve: What to expect
Well, we finally got what we asked for.
Just a few days ago, Trump confirmed his plans to launch a U.S. Crypto Reserve.
But with a little twist:
Initially, it was expected that only BTC will be included, but Trump announced his plans to also include ETH, XRP, SOL, and ADA in the reserve.
What does this mean for crypto?
Including altcoins in the reserve comes with several pros & cons:
The good part (for us) is that this could be insanely bullish for altcoins and bring them back into the spotlight after months of BTC dominance going up only.
The bad part is that Trump would likely need Congress’s approval to fund a national crypto reserve, and including several random coins in it significantly reduces the chances of getting an approval.
I’m by no means a Bitcoin maxi, but I think that including only BTC (and maybe ETH) in the reserve would have been the right decision for the beginning.
But here’s where things get interesting:
David Sacks, White House A.I. & Crypto Czar, published the tweet below following the backlash that Trump’s post about the reserve received:
According to him, it looks like American taxpayer money won’t be used to buy the tokens that will be part of the US crypto reserve.
This certainly increases the odds of a US crypto reserve being launched.
It’s unclear, though, how it will be funded, given that the US government is currently holding only some BTC and ETH, which were seized a long time ago, and doesn’t have any SOL, XRP, or ADA.
But we might get more details about this tomorrow.
Donald Trump will host the first-ever White House Crypto Summit tomorrow, on March 7, and he is expected to make a few big announcements during it.
Now, let's address the elephant in the room:
Will the launch of a US crypto reserve be a sell-the-news event?
If it’s a one-time thing where, for example, the US gets a donation in XRP & ADA tokens from Ripple and Cardano for the reserve and it just keeps holding these tokens without doing anything else, then yes.
But if Trump’s proposal involves significantly increasing the no. of tokens held by the US crypto reserve over time, this would be very bullish for crypto.
Obviously, the total value of the tokens that will initially be held in the US reserve will also be an important factor. The higher, the better for our bags.
Besides this, rumors are circulating that the Trump administration is also planning to announce a 0% capital gains tax on crypto. (Although I doubt they’ll do it tomorrow)
(According to various sources, Eric Trump allegedly confirmed in January that U.S.-based crypto projects would be exempt from capital gains tax)
This would positively impact prices far more than a US crypto reserve.
Why? For two main reasons:
A strategic US crypto reserve is already partially priced in as Trump has now officially confirmed that he wants to establish one
Eliminating the capital gains tax on crypto could attract huge amounts of capital from the stock market and other financial markets to crypto
But it remains to be seen if this will actually happen.
Tomorrow’s White House Crypto Summit is going to be interesting to watch for sure.
Expect a lot of volatility.
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Why is this such a big deal?
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What’s next for Stacks?
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On-chain Alpha🔎
XRP flipped ETH in FDV for a short period of time 💀
Crypto Meme😂
The latest developments in DeFi
Aave DAO proposed a buyback program for $AAVE
Pendle introduced Community Listings, enabling any protocols to easily launch their own yield markets on Pendle
Metamask announced an upcoming major UX upgrade and native support for Solana and Bitcoin
IO Net partnered with Frodobots and OORT to increase the usage of its GPUs. All its recent partnerships helped the network to achieve significant PMF
Trump announced a US National Crypto Reserve that will include BTC, ETH, SOL, ADA, and XRP
mETH Protocol opened claims for its S2 Methamorphosis airdrop program. Season 3 of the Methamorphosis program is confirmed to start soon
Uniswap Foundation approved a $165.5 million funding proposal to support the launches of Uniswap V4 and Unichain
Mass enabled trading tokenized stocks on Arbitrum. The holders of tokenized stocks also get dividends directly in their Mass account
Cronos, the L1 blockchain, is discussing a proposal to reverse a token burn from 2021 (yes, this is real)
Hey Anon, Daniele Sesta’s DeFAI project, went live on Solana
Fluid’s proposal to deploy Fluid on Polygon went live
Ethereum’s developers activated the Pectra Upgrade on the Sepolia test network
Base L2 introduced Flashblocks, which will make the network 10x faster
Ondo Finance partnered with Mastercard to bring tokenized real-world assets to Mastercard’s Multi-Token Network
Coinbase is looking to release a tokenized version of its COIN stock
That’s all for this week!
Until next time,
The DeFi Investor
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The reserve seves as a confirmation that we cannot base our investment decisions on real time events and we have to stick to the natural market cycles.