President Donald Trump appears to be employing a classic real estate negotiation tactic in his approach to establishing a strategic crypto reserve. The strategy – starting with extreme demands to create leverage for a more modest outcome – is familiar territory for the former real estate mogul.
On Sunday, Trump announced on Truth Social that he expects XRP, Solana and Cardano to be included in a strategic digital assets reserve alongside bitcoin and ether. Markets initially responded with enthusiasm. The total cryptocurrency market capitalization surged 11% – approximately $300 billion – reaching $3.09 trillion.
The rally fizzled Monday as market participants began criticizing Trump for appearing misinformed about including XRP and ADA. Observers noted that Trump still needs Congressional approval for any reserve plan. Critics also pointed out that investing in alternative cryptocurrencies contradicts his administration's stated goal of reducing costs and national debt.
"Big problem here is optics. When you include altcoins whose use case is too nascent to be deemed 'nationally strategic,' you risk the assumption of inside dealing even if it were patently false," said Jeff Park, head of alpha strategies at Bitwise Investment Management, in a post on X. "This is politically negative, even among a subset of crypto enthusiasts."
Some market analysts interpret Trump's mention of alternative cryptocurrencies as a negotiation strategy. They suggest he's deliberately making extreme demands to gain leverage in discussions about the reserve.
"The announcement is probably just Trump's usual negotiation tactic. I.e. Calling for a Strategic Reserve with XRP, SOL and ADA, so he can get one for BTC (and maybe ETH)," wrote Ilan Solot, senior global market strategist at Marex Solutions, in a client note titled "Curb Your Enthusiasm."
Solot added that while the U.S. would likely retain seized digital assets, the probability of new bitcoin purchases is below 50%. He assessed the odds of ethereum purchases as "small but real" while putting altcoin acquisition chances at "miniscule."
Critics question XRP and ADA's inclusion by highlighting their limited real-world utility compared to Ethereum and Solana, which actively support financial activities through stablecoins. Another factor: the Chicago Mercantile Exchange has not announced plans to list XRP and ADA futures.
Jason Atkins, chief commercial officer at crypto market-making firm Auros, described market reactions to Trump announcements as following three phases. The process begins with rumors, progresses to "hyperbolic announcements," and concludes with difficult negotiations.
"The second phase is triggered by an official announcement from Trump or his team, which tends to mirror the speculative nature of the first," Atkins told CoinDesk. "His negotiation style – characterized by hyperbole, outsized promises, and demands beyond what is immediately feasible – often results in an initial surge in sentiment."
Atkins warned that the possibility of another leverage washout remains high as investors reassess regulatory realities. "Given that Congressional approval remains a hurdle and the timing of real fund movements is uncertain, traders and investors will need to assess whether this is a structural shift or just another cycle of speculation-driven volatility," he noted.
Disclaimer: The information provided in this article is for educational purposes only and should not be considered financial or legal advice. Always conduct your own research or consult a professional when dealing with cryptocurrency assets.