Bitcoin Price Reaction to Trump’s National Guard Move: Key Insights for Investors

The cryptocurrency market witnessed a dramatic shift following United States President Donald Trump's announcement of deploying the National Guard and creating a national strategic crypto reserve.

The cryptocurrency market showed signs of recovery on Monday, rebounding slightly from recent lows. However, the market is still grappling with the implications of President Donald Trump’s announcement to deploy the National Guard and create a national strategic crypto reserve.

Trump’s announcement, made on his Truth Social platform on Sunday, also mentioned his administration’s focus on elevating the cryptocurrency industry.

“We’re going to make America the crypto capital of the world!” Trump stated in his post.

The president's statement comes in direct contrast to the Biden administration's policies, which Trump described as “corrupt.”

Trump's surprising role as an ally to the crypto community is noteworthy, especially considering the lack of clear cryptocurrency regulations in the US, despite efforts like the Bitcoin Act introduced by Senator Cynthia Lummis.

The administration plans to include five cryptocurrencies in the national strategic crypto reserve, namely Bitcoin (BTC) and Ethereum (ETH) as the primary assets. Smaller currencies like XRP, Cardano (ADA), and Solana (SOL) will also be part of the reserve.

This move aims to stabilize the volatile crypto market and enhance the credibility of digital currencies as an alternative store of value.

Following Trump’s announcement, Bitcoin experienced a surge of over 10%, rising to $94,000 from the previous price of $86,000.

Ethereum also showed significant gains, while smaller altcoins like Cardano saw triple-digit percentage increases. Cardano, for instance, jumped 60% to $1.25 before settling at $0.97.

These price movements highlight the market’s sensitivity to political developments and the growing influence of government policies on crypto valuations.

However, it's important to note that despite the recent surge, Bitcoin is still trading at a loss of over 50% for the year.

As the world’s largest economy, the US has significant sway over international crypto regulations. Trump’s initiative positions America as a leader in shaping the future of cryptocurrency governance, potentially reducing regulatory uncertainty for investors.

The concept of a national reserve is not new. The US already maintains the Strategic Petroleum Reserve (SPR), which serves as an emergency crude oil stockpile. Similarly, a crypto reserve could act as a financial safeguard, providing stability during economic downturns or market crises.

While the immediate market reaction to Trump’s announcement was positive, cryptocurrencies remain highly volatile, and investors should exercise caution and diversify their portfolios to mitigate risks.

Furthermore, the lack of clear regulatory frameworks poses challenges for the crypto industry, which investors should keep in mind as they follow developments closely.