Donald Trump speaking at the Bitcoin 2024 conference in Nashville in July 2024. Photo / Bloomberg via Getty Images
Donald Trump’s announcement that the United States will include three lesser-known digital tokens in its strategic crypto reserve was greeted with skepticism in the industry, with investors questioning the project’s merits and the coins he selected giving up some of their initial gains.
Trump said Sunday on Truth Social that the XRP, SOL and ADA tokens will be included in the reserve, along with Bitcoin and Ether. The news ignited an immediate crypto rally, offering relief to an asset class fresh off its worst month since 2022.
Yet the initial euphoria soon gave way to questions about everything from the feasibility of Trump’s plan to the motivations behind it. Crypto markets were mostly back in the red on Monday, with XRP, SOL and ADA each suffering intraday declines of more than 10% after soaring the day before. Bitcoin and Ether also fell.
The February crypto rout had put pressure on Trump, who returned to the White House after the industry showered him with campaign donations and praise.
Even the Securities and Exchange Commission’s reversal of a years-long crackdown had failed to stem the selloff, which many attributed in part to nervousness about Trump’s trade tariffs and dramatic moves to gut government programs.
“For a president who thrives on being the market’s hero, last week’s risk asset performance was anything but inspiring,” QCP Capital said in a note on Monday.
“The political calculus was clear - Trump needed a win before his approval ratings start slipping, a metric he likely takes very personally.”
XRP was down 11% at 10:05 a.m. in New York, while SOL slipped 18% and ADA fell almost 10%. Bitcoin was about 5% lower, trading back below $90,000, while Ether lost almost 10%.
In its first statement about creating a crypto reserve in January, the White House said such a stockpile would be “potentially derived from cryptocurrencies lawfully seized by the Federal Government through its law enforcement efforts”.
@washingtonpost “MAKE BITCOIN GREAT AGAIN”- Trump As avian flu continues to impact millions of laying hens, causing egg prices to hit an all-time high, the U.S. Department of Agriculture announced Wednesday that it will invest $1 billion to try to curb the spread of the virus and bring consumer prices back down to earth. In an opinion piece in the Wall Street Journal, Agriculture Secretary Brooke Rollins said the department has developed a five-pronged strategy to eradicate avian flu. That post highlighted several lesser-known digital tokens that would be part of the reserve, including solana, cardano and XRP, a token associated with Ripple. In a second post, Trump added that “obviously, BTC and ETH, as other valuable Cryptocurrencies, will be the heart of the Reserve,” referring to bitcoin — the largest and oldest cryptocurrency — and ether, the token used on the Ethereum network.
♬ original sound - We are a newspaper. - We are a newspaper.
Bitcoin tends to be the main crypto token seized by law enforcement agencies, including in the bust of the notorious Silk Road website.
The initial announcement contained little detail on how the reserve would be created, disappointing investors and helping set the stage for February’s selloff.
Trump’s Sunday posts came just as his crypto czar David Sacks prepares to host the White House’s first industry summit. On Monday, Sacks took to the X platform to announce that he sold all his cryptocurrency holdings - including Bitcoin, Ether and SOL - before Trump’s administration took over in January.
XRP is the cryptocurrency associated with Ripple Labs Inc., the company run by Brad Garlinghouse. SOL and ADA are the native tokens of the Solana and Cardano blockchains. Below is a summary of the tokens’ history and the people they’re linked to.
Trump in February shared a CoinDesk story about Garlinghouse on Truth Social, drawing both cheers from fans of XRP - Ripple’s native token - and grumbling among other crypto executives.
Garlinghouse had said in December that the company planned to donate $5 million worth of XRP to Trump’s inauguration festivities. He and Ripple’s chief legal officer, Stu Alderoty, have been photographed dining with the President at Mar-a-Lago.
That level of political access represents a stark reversal of fortunes for the San Francisco-based company, which was sued in 2020 by the SEC and accused of offering unregistered securities. A US district court later found that XRP was a security when sold to institutional investors but not when sold to retail investors, which was seen as a win in the crypto industry. The SEC appealed that ruling. While the SEC has dropped many crypto enforcement actions, the Ripple appeal has not yet been abandoned.
Founded in 2012 and originally named Opencoin, Ripple was one of the earlier companies to begin developing distributed ledger technology for mainstream financial services. It created its own platform with the goal of speeding up and cutting the cost of settling international payments.
Like many other blockchain startups targeting traditional financial-services flows, it has had mixed results, with banks being slow to adopt the technology.
Solana is the blockchain of choice for issuers of so-called memecoins, digital assets with little intrinsic value that can nevertheless balloon in value if they’re able to capture the attention of social media users - and which are liable to implode just as quickly.
Trump and his wife Melania launched memecoins on Solana in January. The president’s token is down about 80% from its all-time high of about $74, according to CoinGecko data. In February, Argentina’s President Javier Milei became embroiled in a political scandal after directing his followers to a Solana-based memecoin named Libra in a post on X.
Launched in 2020, Solana was once closely associated with now-imprisoned entrepreneur Sam Bankman-Fried and his trading firm Alameda Research. The price of SOL, its token, fell sharply after the collapse of Bankman-Fried’s crypto empire in November 2022.
It then rebounded in 2024 before hitting an all-time high of $295 on Jan. 19 - the same weekend that Trump debuted his memecoin. The token has since retreated 45% to trade at about $160.
Cardano, which positions itself as a rival to Ethereum, launched in 2017 after raising over $60 million through a sale of its tokens, according to CoinGecko records. Unlike Ethereum, which is considered the blockchain industry’s main commercial highway, Cardano has struggled to claim much market share in decentralized finance markets, which rely on automated software rather than people to execute functions.
Charles Hoskinson, co-founder and CEO of the company behind the Cardano blockchain, said in a podcast posted on X shortly after Trump’s win in November that he had been helping US lawmakers to shape crypto policy.
The total value of assets locked on Cardano currently stands at $607 million compared with about $90 billion on Ethereum, according to DeFiLlama data.
Written by: Philip Lagerkranser, with assistance from Sidhartha Shukla, Anna Irrera and Emily Nicolle.
The industry faces challenges but hopes to bring newcomers and veterans together.