President Donald Trump has announced plans to create a strategic crypto sanctuary that will shift gears from his previous promise to stockpile Bitcoin. Trump’s cryptocurrency reserve consists of Bitcoin, known as “digital gold” because of its ability to hedge inflation, along with ether, the second largest cryptocurrency by market capitalization, XRP, Solana and Cardano.
The latest proposal lacks important details such as size, timing, whether or not a Federal Reserve or another entity will manage it, but Trump’s move has sparked debate in the crypto industry.
Some argue that diversifying national reserves with various cryptocurrencies could be beneficial, while others warn that it could be a dangerous proposition. Beyond Bitcoin, which serves as a hedge against inflation, other cryptocurrencies have clear use cases, and adding them to the sanctuary is not necessary or discreet.
Lorien Gabel, co-founder and CEO of Blockchain Company Figment, welcomed Trump’s move, calling it a “monetary change in how digital assets are valued at the highest levels.” However, he stressed that simply holding these assets is not enough. It is essential to set them up to ensure that they are and maintain network stability.
In the cryptocurrency world, staking involves committing a certain amount of cryptocurrency to a blockchain network for a specific period of time. This process plays a key role in supporting network operations, such as verifying transactions and maintaining overall security.
“If the US government is serious about making these assets part of its financial infrastructure, it needs to be able to be staked responsibly.”
Michael Terpin, CEO of Transform Ventures and author of Bitcoin Supercycle, told Quartz in an email that the proposed US crypto strategic reserve was inaccurate by the Bitcoin community.
He argues that strategic stockpiles should consist solely of Bitcoin, a top-quality, truly decentralized digital asset. He added that it is the only digital asset that consistently reaches a new all-time high across all cycles.
“Additional cryptocurrencies controlled by businesses and foundations is similar to adding gold mining and energy stocks to strategic gold and oil reserves.”
“Keep it simple and safe. Keep your strategic reserves in Bitcoin.”
Bitcoin Financial Services Firm Swan Bitcoin, Managing Director, Steven Lubka, reflected Terpin’s sentiment, highlighting that Bitcoin is the only truly neutral global asset and the only cryptocurrency suitable for US strategic reserves.
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