Cryoto savior or market tanker? Donald Trump’s recent presidential win has brought mixed reactions from the crypto industry. Some believe that he will be its saving grace while others believe that he may bring more harm to the industry. The best way to look at this issue would be his 2 contrasting policies since inauguration: the creation of a Strategic Crypto Reserve and increasing Tariffs on several countries. Let’s take a closer look!

Understanding the Strategic Reserve: Trump’s Bullish Crypto Move

This March 2025, Trump announced the creation of a Strategic Crypto Reserve, aimed at making the U.S. the “Crypto Capital of the World”. 

A strategic reserve is a stockpile of valuable resources controlled by the government, used for national security and financial stability. The U.S. already has strategic reserves for:

• Gold – The U.S. stores thousands of tons of gold in places like Fort Knox to back its financial system.
• Oil – The Strategic Petroleum Reserve ensures the country has emergency fuel supplies.
• Medical Supplies – The U.S. maintains a National Strategic Stockpile of vaccines and emergency medicines.

Now, Trump is applying the same concept to Bitcoin and other digital assets.

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Timeline of the U.S. Crypto Strategic Reserve

March 2, 2025 – Trump Announces the U.S. Crypto Strategic Reserve

Trump announced the creation of a U.S. Crypto Strategic Reserve, which would hold major cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Cardano (ADA), and Ripple (XRP). 

Many crypto investors looked forward to this as it could strengthen crypto adoption and mean possible buying pressure on their assets. Meanwhile, some also disliked the move thinking that it could lead to centralization and possible market manipulation from the government.

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March 6, 2025 – Trump Signs Executive Order for Strategic Bitcoin Reserve and Digital Asset Stockpile

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A few days later, Trump refined the plan, creating two separate reserves:

1. Strategic Bitcoin Reserve –
   
   
   
   • Holds Bitcoin (BTC) only.
   • Bitcoin will be kept as a store of value and never sold.
   • The Treasury and Commerce Departments are authorized to find ways to acquire more Bitcoin at no cost to taxpayers.
   • Will only include assets seized in criminal or civil asset forfeiture cases.
2. U.S. Digital Asset Stockpile –
   
   
   
   • Stores other cryptocurrencies like Ethereum (ETH), Solana (SOL), Cardano (ADA), and Ripple (XRP).
   • Will only include assets seized in criminal or civil asset forfeiture cases.

David Sacks, a prominent crypto advocate and Trump ally, described the Strategic Bitcoin Reserve as a “digital Fort Knox” for Bitcoin, calling it “digital gold.” He also pointed out that the U.S. had previously held many of its Bitcoin holdings too early, costing taxpayers over $17 billion in lost value. With the new Bitcoin Reserve, he explained that the BTC would be held long-term instead of being dumped on the market. This means that the government’s Bitcoin holding could serve as a long-term financial hedge.

The creation of Strategic Crypto Reserves shows that the U.S. government is changing the way they view the asset class. Rather than just seeing it as something criminals use, they’re beginning to regulate it and advocate for its adoption! 

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Understanding Tariffs: Trump’s Bearish Crypto Move

On the other hand, another of Trump’s major policies this term is to increase tariffs on several countries such as Canada and Mexico. 

A tariff is essentially a tax placed on imported goods, making them more expensive for consumers. These tariffs are implemented for several reasons. One key purpose is protecting domestic industries by raising the cost of foreign goods, which encourages consumers to buy American-made products. Additionally, tariffs serve as a way to raise government revenue, as import taxes generate billions of dollars. They are also commonly used as a trade war strategy, acting as bargaining tools in trade disputes with other nations. 

However, tariffs come with significant downsides. They often result in higher consumer prices, increasing costs for both businesses and everyday consumers. Moreover, they can trigger retaliation from other countries, leading to counter-tariffs that slow down global trade and economic growth. Lastly, tariffs create market uncertainty, making businesses hesitant to invest in an unpredictable economic environment.

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Timeline of Trump’s Tariff Policies

March 4, 2025 – Tariffs on Mexico and Canada

• 25% tariff on steel and aluminum imports from Mexico and Canada.
• Canada retaliated with $30 billion in tariffs on U.S. goods.

March 12, 2025 – Trump Threatens the EU

• Announced plans for a 200% tariff on European wines and alcohol in response to EU tariffs on U.S. whiskey.

Ongoing – China Trade War Threats

• Trump suggested implementing new tariffs on China, increasing uncertainty in global markets.

Since Trump announced tariffs, stock markets began to fall sharply. This was likely due to fears of trade conflicts with Mexico and Canada. Several American businesses reliant on importing goods were also expected to take a hit. Naturally, Bitcoin and cryptocurrencies, whose prices are closely correlated to stocks, also began crashing. 

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Comparing the Strategic Reserve vs. Tariffs

Overall, Trump’s policies have both been bullish and bearish to the Web3 space. 

The Strategic Reserve is bullish because it shows the U.S. government is taking crypto seriously. While the reserve will not actively purchase assets, the fact that the government is holding Bitcoin and other crypto instead of selling them reduces selling pressure immensely and pushes others to adopt the technology as well. 

In contrast, Trump’s tariffs are bearish because they create economic instability. When global trade slows, investors pull back from high-risk assets like stocks and crypto. Businesses struggle, supply chains are disrupted, and financial uncertainty grows. This leads investors to prefer more stable assets like gold and in turn sell their cryptocurrencies. 

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Final Thoughts

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So is Trump good or bad for crypto? Well, it’s a mix of both. Some of his policies will benefit the industry (Strategic Reserve) whereas some will cause selloffs (Tariffs). However, that isn’t the main takeaway we can get from this. 

Whether or not Trump is more good or bad for Web3, we can now see that crypto is becoming more and more tied to global politics. It’s no longer just a fun little experiment some techy people use. World leaders' actions, regardless of intention, can dramatically impact crypto prices.

The lesson for investors? The macroeconomy is difficult to predict so why bother? A president can put forward a bullish policy one day, and then a bearish one on another. What we can do is have a plan with how we manage our crypto assets. Always practice risk management and prepare for market volatility in either direction. We can’t control Trump but we can be a master of ourselves! 

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