Bitcoin hit a new high on Trump’s first day
Several U.S. states are considering proposals to create their own strategic bitcoin reserves.
There’s never a dull moment on the blockchain. Here’s what you need to know this week:
Bitcoin neared $110K as the Trump administration began. Plus, new SEC leadership launched a crypto task force to chart a “sensible regulatory path.”
Almost a dozen states are pursuing bitcoin reserves. A closer look at what they’ve proposed, and the potential for a federal BTC stockpile.
Numbers to know. MicroStrategy’s latest BTC buy, the percent of Kenyan crypto owners who say crypto improves economic freedom, and more key stats.
MARKET BYTES
Bitcoin hits new all-time high — and volatility — as second Trump administration begins
Last year, when Donald Trump was on the campaign trail, he promised he’d be “a crypto president.”
On Monday, as his second administration began, bitcoin soared to a new all-time high of nearly $110,000, fueled by expectations that a wide range of crypto-forward policy changes would be imminent.
By the end of the day, however, prices dropped below $101,000, as some traders may have sold for a profit and others were potentially disappointed over the lack of crypto references in the president’s inauguration speech or immediate “day one” actions.
On Tuesday, a sunnier picture began to emerge. U.S. Securities and Exchange Commission (SEC) Acting Chairman Mark Uyeda announced a task force aimed at crafting a set of clear rules of the road for crypto, after which prices recovered to around $107,000. A set of additional actions are still expected from the administration in the coming days and weeks.
“The president has moved quickly on his agenda,” Coinbase Chief Legal Officer Paul Grewal told Reuters. “The SEC has made it clear they understand that and want to be a part of that.”
Trump also launched a token of his own on the Solana blockchain last Friday. The Official Trump (TRUMP) coin quickly saw billions of dollars in trade volume, and as of Thursday morning was sitting in the Top 25 biggest cryptocurrencies, with a market cap of $7.4 billion.
Here’s what else you need to know about markets this week.
New SEC task force to develop “sensible regulatory path” for crypto
For the last four years, the SEC took a largely “hostile” stance in regards to crypto — refusing to issue clear guidance for the industry, pushing back against innovations like crypto exchange-traded funds, and often pursuing “regulation by enforcement” via lawsuits.
Under the Trump administration, the SEC is already taking a different approach, as evidenced by its creation of a new crypto task force that will be led by longtime SEC commissioner Hester Peirce. The goal of the group is to craft clear crypto regulations that will clarify previously murky rules that led to “confusion about what is legal, which creates an environment hostile to innovation and conducive to fraud,” according to the SEC’s announcement.
In Peirce’s words… “We look forward to working hand-in-hand with the public to foster a regulatory environment that protects investors, facilitates capital formation, fosters market integrity, and supports innovation,” wrote the task force’s leader.
What do crypto leaders and analysts think could happen next?
Speaking to CNBC, Coinbase CEO Brian Armstrong described the inauguration of the new administration as “the dawn of a new day for crypto” and expressed hopes for an executive order that would direct government agencies to work together to create “clear rules”: “That’s what would really allow capital to flow into the United States and for startups to be built there,” said Armstrong.
Meanwhile, Jeremy Allaire — the CEO of USDC issuer Circle — predicts that Trump will soon sign an executive order allowing banks to offer a wide range of crypto services to clients.
What about prices? According to a new Standard Chartered report, an increase in institutional investment in crypto could push BTC to $200,000 and ETH to $10,000 by the end of the year. Longer term, BlackRock CEO Larry Fink suggested that a single bitcoin could someday be worth as much as $700,000 if enough major investment funds added crypto to their allocation mix.
Litecoin spikes on potential ETF launch news
Last year at this time, crypto markets were rallying after the blockbuster debut of spot BTC exchange-traded funds.
This week, Litecoin (LTC) surged by around 20% on the news that Canary Capital had received comments from the SEC on its application for an ETF that would buy LTC and sell shares via conventional markets. “Litecoin ETF now has all the boxes checked,” Bloomberg ETF analyst Eric Balchunas said on X. “The first altcoin ETF of 2025 is about to be on the clock.”
The SEC is also considering applications from firms for ETFs that would hold SOL, XRP, HBAR, and even an index of cryptocurrencies, similar to the S&P 500 — as well as a new application for an ETF that would hold President Trump’s token.
Why might an LTC ETF be approved before applications for tokens like Solana and XRP? In part, Balchunas says, because it’s “seen as a commodity” like BTC. (In fact, Litecoin’s code is based on Bitcoin’s.)
Big money… According to JPMorgan analysts, the market for ETFs holding XRP and Solana could be worth as much as $14 billion in their first year of trading.
BITCOIN CACHE
It’s not just Trump – states want their own strategic bitcoin reserves too
As President Trump begins shifting crypto policy in the U.S., market watchers and policymakers alike are awaiting word on one of the boldest proposals from the campaign trail: a federal strategic bitcoin reserve.
While it’s still unclear if a federal bitcoin stockpile will happen, a number of U.S. states are taking definitive steps of their own, further boosting bitcoin’s legitimacy as an alternative reserve asset to gold. With nearly a dozen now pursuing policies aimed at holding bitcoin in their state coffers, it appears to be a matter of when, not if, a U.S. state makes its first bitcoin purchase.
What’s been proposed so far? Here’s what you need to know.
What is a strategic bitcoin reserve, and why do some states want one?
Governments across the world have created “strategic reserves” of assets deemed to be critical resources, with perhaps the best known examples being the U.S. Strategic Petroleum Reserve, the world's largest supply of emergency crude oil, and the U.S.’s gold reserve, also the largest supply in the world, with 8,134 metric tons of the precious metal, worth around $773 billion.
Similarly, strategic bitcoin reserves would be government-controlled stockpiles of bitcoin that could be liquidated or used in times of crisis. Many states considering bitcoin reserves see such a stockpile as a potential bulwark against rising inflation or other unforeseen economic shifts.
In North Dakota’s draft resolution for a bitcoin stockpile, lawmakers cited rising inflation as a reason to encourage the state to diversify the assets it invests in. And in Ohio, state Rep. Derek Merrin, who introduced a bill there to start a bitcoin reserve, asserted that bitcoin could help “supplement our state's portfolio and preserve public funds from losing value.”
“The state that is last to build bitcoin reserves will lose,” said New Hampshire Rep. Keith Ammon. “It’s urgent that states act sooner than later, and that takes some education on the part of state officials.”
Which states are pursuing strategic bitcoin stockpiles?
At least nine states have introduced bills proposing the creation of stockpiles of bitcoin or other digital assets: Utah, Pennsylvania, Texas, New Hampshire, North Dakota, Wyoming, Massachusetts, Oklahoma, and Ohio.
Additionally, lawmakers in Florida are reportedly aiming to introduce legislation to create a bitcoin reserve this year.
What’s been proposed so far?
Generally, states are aiming to start buying bitcoin using state funds, with the purchases often falling under control of the state treasury.
In Pennsylvania, which would seek to make purchases using the State General Fund, the State Investment Fund, and the state’s Rainy Day Fund, the draft legislation caps the amount of each fund that could be spent on bitcoin at 10%. Similarly, Oklahoma, Massachusetts, and Utah have 10% caps in their draft legislation, while Wyoming has a 3% cap.
States also differ in how they’d like to hold their bitcoin. In Texas, draft legislation mandates any bitcoin be held for at least five years in cold storage (which is a device not connected to the internet). Wyoming and Massachusetts, though, would allow bitcoin to be held by a qualified custodian, or in the form of ETF shares.
Some states also seem interested in bitcoin’s potential beyond being a simple reserve asset.
New Hampshire’s legislation would authorize the state treasurer to also engage in “lending or staking” practices, and Massachusetts’ legislation also supports the loaning of its bitcoin to generate returns for the state, with certain conditions.
What could this mean for a national bitcoin reserve?
It’s still unclear what a bitcoin reserve could look like at the federal level. Any federal bitcoin reserve would likely first be funded with the more than 200,000 bitcoin (worth around $19 billion) estimated to already be in the government’s possession, mostly from criminal seizures.
There has been legislation introduced by Wyoming Sen. Cynthia Lummis that calls for the government to buy 200,000 bitcoin a year for five years. But authorizing such purchases would first require policy changes at the Treasury, plus the blessing of Congress.
As governments across the world increasingly embrace bitcoin, though, it could just be a matter of time before the U.S. federal government does the same, said Coinbase CEO Brian Armstrong.
“I think the world is moving to a bitcoin standard for money,” Armstrong said. “Any government who holds gold should also hold bitcoin as a reserve."
NUMBERS TO KNOW
50,000 ETH
Amount of ether (worth around $167 million) that the Ethereum Foundation allocated this week to “participate in the DeFi ecosystem,” according to one of the nonprofit’s leaders. The move came as the organization, which helps steward Ethereum’s development and ecosystem growth, has undergone a series of leadership changes.
11,000 BTC
Amount of bitcoin, worth roughly $1.1 billion, that MicroStrategy added to its corporate treasury over the last week. For those of you keeping score at home, that marks the eleventh consecutive week the firm has acquired bitcoin, and brings the total of their bitcoin holdings to a whopping 461,000 BTC (about $49 billion).
97%
Percent of crypto owners in Kenya who say they believe crypto can increase economic freedom, according to Coinbase’s latest State of Crypto report, which polled 4,900 adults in Argentina, Kenya, the Philippines, and Switzerland to understand how several different economies use crypto to navigate the financial system. As the report notes, Kenyans have long led the world in mobile money innovation and are “turning to crypto as the next evolution.”
TUNE IN
Bringing crypto and TradFi together
In the latest episode of Coinbase’s “Evolving Money” podcast, created in collaboration with Bloomberg Media Studios, BlackRock’s Samara Cohen explains why a world where crypto and TradFi integrate seamlessly is closer than you might think, and how her firm is helping to build it.
Listen today on Spotify, Apple, or wherever you get your podcasts.
TOKEN TRIVIA
What is dollar-cost averaging?
A
A gradual investment strategy that does not rely on “timing the market”
B
A method to automate crypto purchases on Coinbase
C
A way to invest any amount of money at regular intervals of time
D
All of the above
Find the answer below.
Trivia Answer
D
All of the above
