Odaily News Eliézer Ndinga, head of strategy at 21Shares, wrote in an analysis that the overall rise in the crypto market was driven by discussions on the U.S. strategic crypto reserve, "which makes me feel a little too optimistic - I expect that once the market has a clear understanding of the timing and specific details, the market may fall back." The creation of a strategic reserve may require congressional approval, and its components - unlike a simple confiscated asset reserve - need to be detailed to address the following issues:
Asset allocation and distribution (e.g., which cryptocurrencies to choose and in what proportions);
holding period (e.g., short-term vs. long-term commitment);
Holdings relative to the total supply of each asset (e.g. 1% of 21 million Bitcoins);
Market integrity measures to prevent large swings or front-running (e.g., limiting daily trading caps);
Asset protection, which may involve a selected crypto custodian (e.g., Coinbase or Anchorage), a bank (e.g., BNY Mellon), or multiple providers to avoid single points of failure. This process will take longer than the market expects. Trump may be using his social media influence to present the initial terms he has set for Congress, aiming to negotiate a compromise. However, the draft may hit snags and require revisions, leading to delays that could slow the current hype.
