Cryptocurrency prices experienced a significant uptick following former President Donald Trump's unexpected announcement that he intends for the U.S. government to purchase and maintain a variety of digital assets as part of a new strategic reserve fund. This initiative reflects Trump's escalating effort to leverage the volatile nature of cryptocurrency prices as an indicator of his public popularity.

On Sunday, Trump took to social media to declare that his administration is working toward establishing a "Crypto Strategic Reserve." This proposed reserve would encompass lesser-known cryptocurrencies such as XRP, Solana, and Cardano, along with the more prominent Bitcoin and Ether. His announcement appears to have momentarily reversed a recent trend of sell-offs in the crypto market.

Following Trump's declaration, Bitcoin rebounded to approximately $90,000 on Monday morning, recovering from a dip below $80,000 the previous week. Meanwhile, XRP, Solana, and Cardano witnessed considerable spikes in valuation after the announcement, though their prices have since shown a gradual decline through Monday morning.

During his campaign, Trump had previously committed to developing a "strategic national Bitcoin" stockpile, which would incorporate Bitcoin that the U.S. government has seized through law enforcement actions. However, Sunday marked the first time he proposed that the government hold various other cryptocurrencies as well. Despite the significance of the announcement, the White House did not disclose specific details regarding the quantities of each cryptocurrency that Trump intends to acquire or how the government would go about obtaining them. Additionally, there was no indication if he would consider incorporating other types of digital currencies.

Eric Trump, the former president's son, expressed on social media that the rise in cryptocurrency prices validated his recent advice to stock up on crypto assets. He stated, "Hopefully, I made someone’s life just a little bit better." This interaction underscores the close relationship between the Trump family and the cryptocurrency sector, which Trump claims has faced "years of corrupt attacks" from the Biden administration.

The crypto industry has felt disproportionately targeted under Biden's leadership and has heavily invested in supporting Trump's election campaigns. In the early days of Trump's administration, several moves aimed at supporting the cryptocurrency sector were noted, including ceasing or delaying significant enforcement actions by the Securities and Exchange Commission.

Prices in the cryptocurrency market surged following Trump's success in the previous election, and when Bitcoin first crossed the $100,000 mark in early December, Trump took to social media to assert, "YOU'RE WELCOME!!!" However, the market has since seen a decline, with critics—including some within the crypto industry—questioning the effectiveness of Trump's initiatives. Notably, there has been backlash regarding the introduction of a personal meme coin shortly before his inauguration, which has since plummeted in value.

Recent dramatic movements in the cryptocurrency market have been exacerbated by factors such as the crash of meme coins associated with Melania Trump and Argentine President Javier Milei, as well as a significant hack of a major cryptocurrency exchange linked to North Korean actors. These incidents have contributed to a diminishing enthusiasm for crypto assets.

Dave Portnoy, a well-known influencer and crypto enthusiast, remarked on social media last week, "Why is crypto in the toilet if Trump is crypto king?" This rhetorical question highlights the uncertainty and skepticism surrounding Trump's claims of being a benefactor to the cryptocurrency market.

The consideration of incorporating cryptocurrencies beyond Bitcoin into the proposed reserve is expected to meet resistance from various factions within the already polarized cryptocurrency landscape. Bitcoin remains the most recognized and widely held cryptocurrency, accounting for over 50% of the total cryptocurrency market capitalization.

Proponents of a government-held crypto reserve argue that it would aid in diversifying government assets and mitigating financial risks. In contrast, critics contend that the inherent volatility of cryptocurrencies renders them unsuitable as reserve assets.

In addition to his Sunday announcement, Trump has also revealed that he plans to convene industry leaders at a "Crypto Summit" at the White House on Friday.