Crypto investors are cautious despite $3T market boom – Why?

• There’s been a massive price jump following the announcement of a strategic crypto reserve by President Donald Trump.
• Trump’s statement triggered a major market rally as liquidity inflows increased.

Cryptocurrency market capitalization has significantly increased after Trump’s announcement. Bitcoin [BTC], Ethereum [ETH], Ripple[XRP], Solana [SOL], and Cardano [ADA are being considered for inclusion.

A U.S. strategic crypto reserve would function as a portfolio of digital assets. It is designed to ensure financial stability, hedge against market volatility, and support future investments. This reserve could serve as a digital counterpart to the country’s gold reserves.

Since the announcement, the market capitalization has surpassed $3 trillion, rising 7.43% to a current valuation of $3.05 trillion. This level was last seen on the 24th of February.

At the time of writing, an additional $1 billion worth of USDT was minted, likely set for market distribution. The issuance of stablecoins like USDT typically signals rising demand for crypto assets. Stablecoins provide a gateway for purchasing tokens in the market.

Source: Etherscan

Notably, the Fear & Greed Index reflects this bullish sentiment, moving from a state of fear (22) to neutral (40). This shift indicates growing optimism among traders.

Not a smooth path ahead for crypto?

Despite widespread enthusiasm, some industry leaders remain skeptical about the long-term impact of a strategic crypto reserve.

Commenting on the announcement, Crypto Czar David Sacks hinted at further developments, particularly in the upcoming White House crypto summit. This led two prominent industry figures to share their concerns.

Brian Armstrong, CEO of Coinbase, argued that a Bitcoin-only reserve would be the most effective approach, stating,

“Just Bitcoin would probably be the best option—simplest and a clear successor to gold.”

He added that if demand for a broader crypto reserve persists, the best route would be a market-cap-weighted index of crypto assets to ensure neutrality.

Arthur Hayes, co-founder of BitMEX, warned that the process could be lengthy and complex, requiring multiple stages of scrutiny. He noted,

“Congressional approval would be needed to borrow money or revalue gold higher. Without that, they have no funds to buy these assets.”

Even though optimism remains; crypto investors maintain a cautious stance, suggesting that broad market acceptance isn’t fully confirmed.