The crypto market experienced a surge following former U.S. President Donald Trump’s announcement of a potential strategic cryptocurrency reserve. However, analysts caution that the rally may be temporary.
On March 2, Trump stated that his Working Group on Digital Assets had been tasked with incorporating three altcoins—XRP, Solana (SOL), and Cardano’s ADA—into the U.S. crypto reserve. He further confirmed that Bitcoin (BTC) and Ether (ETH) would “obviously” be included in the reserve.
This announcement fueled a broad market rebound, pushing the total crypto market capitalization up by nearly 7% to $3.04 trillion. Bitcoin, in particular, saw a strong intraday gain of 7.7%, briefly surpassing the $95,000 psychological threshold.
Congressional Approval Could Delay Implementation
Despite the market excitement, analysts suggest that establishing a U.S. crypto reserve would require congressional approval, which could slow down the process. Aurelie Barthere, a principal research analyst at blockchain analytics firm Nansen, highlighted the complexity of creating such a reserve:
“Acquiring new assets for a government-backed reserve is a complicated process that would need approval from Congress. This could take time, so I would be cautious about the longevity of this price movement.”
Some market observers believe Bitcoin could soon find a bottom after its active addresses hit a near three-month high on February 28. According to IntoTheBlock, this metric suggests the market is at a “critical juncture” and could be nearing a “capitulation moment.”
Analysts Warn of Short-Term Volatility
XRP, SOL, and ADA saw significant gains following Trump’s announcement, outperforming the broader market. However, analysts remain wary of near-term fluctuations.
Nansen research analyst Nicolai Sondergaard noted that while the news has driven price action, volatility remains a key concern:
“As Aurelie pointed out, this isn’t a straightforward process, and I expect further price swings, especially in these specific tokens. We’ve already seen ADA spike to $1.17 before pulling back to $0.94.”
He added: “Even if this news temporarily boosts the market, the real question is whether anything will come of it. If not, it could turn into a bearish signal for crypto.”
Upcoming White House Crypto Summit
Investors are also anticipating other industry developments, including the first-ever White House Crypto Summit, which Trump is scheduled to host on March 7.
While details on the summit’s agenda remain scarce, discussions on stablecoin regulation and legislation related to the proposed strategic crypto reserve are expected to be central topics in ongoing regulatory debates.
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