by
Victoria d’Este

Published: March 04, 2025 at 12:18 pm Updated: March 04, 2025 at 12:18 pm

by Ana

Edited and fact-checked:
March 04, 2025 at 12:18 pm

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Bitcoin and the wider crypto market have seen massive gains since Donald Trump’s election win, though the rally has recently shown signs of slowing—raising concerns about a potential stock market downturn.

The bitcoin price, which started 2024 below $50,000, has climbed to just under $100,000. However, a steep drop to around $85,000 on Tuesday—down 21% from its peak of nearly $110,000—has officially placed Bitcoin in correction territory.

Despite the turbulence, bitcoin has recovered some ground as investors brace for a significant legislative update expected from U.S. senator and bitcoin advocate Cynthia Lummis.

Trump Unveils Strategic Crypto Reserve

Cryptocurrencies surged on Sunday following President Donald Trump’s announcement of a new U.S. strategic crypto reserve. The reserve will include major assets like bitcoin and ether, alongside XRP, Solana’s SOL token, and Cardano’s ADA.

According to a statement Trump posted on Truth Social, the reserve is intended to boost the crypto industry after what he described as years of hostile policies under the Biden Administration. He referenced a new Executive Order on Digital Assets, which directs the Presidential Working Group to move forward with the creation of the reserve, explicitly including assets such as XRP, SOL, and ADA.

Trump also emphasized that bitcoin and ether would play central roles in the reserve, reiterating his personal enthusiasm for both cryptocurrencies.

Markets reacted swiftly to the news. XRP jumped 33%, SOL gained 25%, and ADA got a +60% boost. BTC climbed 10% to $94,000, recovering from a three-month low below $80,000 hit on Friday.

Investors are now turning their attention to the first-ever White House Crypto Summit, scheduled for Friday, where Trump is expected to provide further details about the reserve’s structure and long-term strategy.

This marks the first time Trump has drawn a distinction between a “crypto reserve” and a “stockpile.” A reserve would likely involve regular, active purchases of digital assets, whereas a stockpile would simply hold onto the government’s existing crypto holdings without actively adding to them.

$80 Trillion Plan and a Global Bitcoin Adoption Race

As the U.S. wealth fund triggers what some are calling the start of a global race to adopt bitcoin, bitcoin-supporting U.S. senator Cynthia Lummis has hinted at a major legislative update—just as Michael Saylor promotes his ambitious $80 trillion vision for dominating the digital economy.

Lummis took to X to signal the coming developments, responding to a post from the official account of the U.S. Senate Banking Committee, where she serves. The post announced a “subcommittee hearing on bitcoin and crypto legislation” along with a nominations hearing led by committee chair Senator Tim Scott. Lummis captioned her repost with the phrase, “And so it begins.”

Lummis, one of the most vocal crypto advocates in Congress, has long pushed for the U.S. to establish a bitcoin reserve modeled after the nation’s gold reserves. She has even proposed legislation that would see the U.S. government purchase one million BTC over the next five years.

Earlier this month, Trump’s newly-appointed crypto czar, David Sacks, held his first press conference, announcing the formation of a bicameral working group focused on drafting crypto regulations related to stablecoins and market structure. Sacks described the initiative as the beginning of a “golden age” for the crypto industry.

When asked about the possibility of a Bitcoin reserve, Sacks confirmed that it would be one of the first topics the working group would explore. He added that while the administration was still waiting on a few cabinet secretaries to be confirmed, once the group was fully formed, evaluating the feasibility of a Bitcoin reserve would be one of its initial priorities.

Saylor Pushes Government to Lock in America’s Digital Future

Speaking at the CPAC conference, Michael Saylor, founder of Strategy, urged the U.S. government to acquire 20% of the global bitcoin supply to secure America’s leadership in the digital economy.

Saylor, with 500K BTC in holdings, stated that controlling bitcoin was key to controlling cyberspace. He explained that to truly “own” the future digital landscape, the U.S. would need to own and mine Bitcoin while also running the Bitcoin network itself.

He has previously published a framework detailing how the government could establish a U.S. strategic bitcoin reserve, which aligns with his belief that such a move would generate enormous economic benefits.

Saylor projected that Trump and other U.S. leaders could potentially purchase between 4 million and 6 million bitcoins within just a year. According to his estimates, such a move could create $50 trillion to $80 trillion in value for U.S. taxpayers while also helping to ease the nation’s mounting debt.

He emphasized that there’s only room for one country to secure 20% of the bitcoin network—and he expressed confidence that the United States was best positioned to claim that spot.

Bitcoin at a Historic Point

According to analysts at Bitfinex, bitcoin remains at a crucial point after nearly 90 days of sideways movement. They noted that with traders waiting for a clear catalyst, the cryptocurrency’s next major shift will likely depend on broader macroeconomic trends — and could prove decisive for its trajectory.

After Trump’s election win, bitcoin briefly crossed the long-anticipated $100,000 threshold before settling into a period of consolidation. While some view this as a standard market correction, others — including Jan3 CEO Samson Mow — believe external factors may be artificially capping the BTC price, preventing it from reaching what they see as its fair value.

Meanwhile, recent comments from Tesla CEO Elon Musk questioning the security of U.S. gold reserves have added to the uncertainty surrounding traditional assets. His remarks have reignited interest in Bitcoin as a potential safe haven in times of economic instability.

The Tariff Dilemma

President Donald Trump’s campaign promise to establish a U.S. bitcoin reserve energized parts of the crypto community, but his escalating tariff threats have unnerved investors. Concerns are mounting that a global trade war could put pressure on asset prices across the board.

The Bitfinex panel pointed out that the U.S. economy is already contending with growing challenges, including weakening consumer confidence and rising inflation expectations — both of which could undermine the Federal Reserve’s efforts to keep price growth under control.

Federal Reserve Chair Jerome Powell, who began cutting interest rates with a half-point reduction last September, has now been forced to pause the cycle as inflation shows signs of reaccelerating, adding further uncertainty to the economic outlook.

AI Pushing Crypto Even Higher

Analysts are predicting that a strong performance could boost both tech and crypto markets, providing support for bitcoin’s price. However, a disappointing result could reignite concerns and contribute to further volatility for bitcoin.

Matt Mena, 21Shares’ lead strategist, noted that Nvidia’s earnings are expected to be a significant AI-driven catalyst, potentially benefiting both the tech and crypto sectors.

Danni Hewson, head of financial analysis at AJ Bell, highlighted that the upcoming earnings report is particularly important given the unease surrounding the short-term prospects of tech stocks. Hewson emphasized that Nvidia’s outlook for the coming year could significantly impact markets, especially amidst concerns over Trump’s new restrictions on Chinese investments and the development of the DeepSeek AI model.

Hewson also pointed out that U.S. consumer confidence is fragile, with growing nervousness about the near future, particularly after the pause in interest rate cuts.

What Now?

As a pivotal U.S. policy announcement looms, the crypto market is bracing for what’s to come. Will Bitcoin break through its previous highs, or will hesitation from institutional players drive prices down? What is clear, however, is that Bitcoin’s next move will likely have significant and far-reaching consequences for both the digital asset landscape and the global economy.

The upcoming weeks may very well shape Bitcoin’s place within the broader financial system, making this a crucial moment for both investors and policymakers alike.

About The Author

Victoria is a writer on a variety of technology topics including Web3.0, AI and cryptocurrencies. Her extensive experience allows her to write insightful articles for the wider audience.

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Victoria d’Este