Regression of rationality | Does encryption no longer trust Trump?

Author: Silent Scof, ChainCatcher

Edited by: TB, ChainCatcher

Last night, the cryptocurrency market fell into a carnival due to a post Trump mentioned "crypto strategic reserves". XRP, SOL, and ADA soared by more than 30% in a single day, and Bitcoin and Ethereum followed suit, and the market value of the entire crypto market surged by US$300 billion.

The "pull the market" effect is obvious, but the market does not seem to have reappeared in the past for the warm cheers for the policy bull market.

The rationality of encryption is returning.

1. Encrypted rationalist: It is not so much a strategic reserve, but

rather a strategic pull-up

Anyone who understands the US legislative system knows that the president has no right to unilaterally establish a national crypto reserve, which requires a long and complex game for Congress.

Although the latest progress in the "cryptocurrency strategic reserve" has boosted market sentiment in the short term, some industry insiders are skeptical of Trump's cryptocurrency reserve plan. More rational voices believe that the plan is more like a political gesture or a negotiating strategy than a truly executable national strategy.

Crypto analyst Arthur Hayes said bluntly on the day of the surge: "This is just a short check, and the US fiscal has no budget to increase its holdings of crypto assets."

Chris Burniske, partner at Placeholder VC, retweeted the view of Udi Wertheimer, founder of Taproot Wizards: By far, the best interpretation of strategic reserves is that this is just a typical Trump negotiation strategy. To achieve true reserves, Trump must convince Congress that he cannot decide for himself. Whenever Trump needs to convince other stakeholders, he always starts with a ridiculous proposal and can back down afterwards, such as the previous Gaza plan, the annexation of Canada, and the current ADA strategic reserve. So, in Trump's "chess language", this means that he is telling Congress: If I don't agree with the Bitcoin reserves, I will put forward more outrageous conditions.

Alex Xu, research partner at Mint Ventures, pointed out that since Trump took office, SOL, XRP and ADA have frequently interacted with Mar-a-Lago and have given Trump a lot of support in public, such as donating money to the inauguration fund. Private transfer of interests may be more complicated, and Trump's statement this time can be seen as a reward for these support to some extent, providing him with a "advertising space" within the scope of presidential authority.

2. It is not very "reliable" to include assets such as ADA, XRP in the

national reserves

In the long run, incorporating assets such as ADA and XRP into national reserves will not only lack feasibility, but will instead weaken the seriousness of Bitcoin as a strategic reserve asset and further reduce the possibility of relevant legislation being passed at the federal level. It is one thing to have the working group study and advance, but it is another to really legislate. The Republicans' narrow advantage in the House means that it is almost impossible for them to promote legislation to include SOL, ADA, and XRP in the national reserves.

At present, the only realistic possibility is that Trump bypasses Congress and allows the Ministry of Finance to directly establish a national sovereign fund through administrative means to purchase these assets. But the feasibility of this move is questionable. How many political and economic benefits do SOL, XRP, and ADA need to provide for this to prompt the president to order the use of taxpayer funds to purchase?

As Aave founder Stani Kulechov joked: “Good news: strategic crypto reserves are in preparation; bad news: lack of DeFi; ugly news: XRP, SOL, and ADA.

Dennis Porter, co-founder and CEO of Satoshi Action Fund (SAF), launched a poll on X asking “what assets are strategic crypto reserves.” This survey aims to gather the crypto community’s perceptions about which digital assets should be considered strategic reserves.

As of now, there have been 15,367 votes, and the proportion that supports BTC only is 47.7%; the proportion that supports BTC, ETH, XRP and SOL is 33.6%; the proportion that supports the top ten cryptocurrencies in market capitalization is 15.6%; and the proportion that supports the inclusion of all cryptocurrencies and Meme coins is 3.1%.

There is no need to say much about public opinion.

3. The cow returns? But retail investors haven't returned quickly yet

Faced with such a market, although they shouted "Bulle back, come back quickly!", retail investors who have experienced several rounds of bull and bear transformation have already learned to be vigilant about the sudden surge, and they are also worried that this market that is too manipulated will appear again.

In the view of Crypto KOL @ DtDt666, "Although the market has risen in the short term, the current currency circle is cold. A sudden operation is as fierce as a tiger, and the rise and fall depends entirely on Trump." This sentence vividly reveals the current market structure - the originally decentralized crypto world is being reshaped by capital and political forces, and the Trump family seems to have become the most important players in this game.

But the question is, is this kind of market prosperity based on political cycles really conducive to the long-term development of the crypto industry? Although Trump's remarks briefly pushed up market sentiment, they made the crypto industry think deeply.

After all, the crypto independent narrative and growth flywheel is still not established.

Recommended reading: " Trump "rescue the market", a look at the most popular "macro events" and "US currency" this week "