Trump announces strategic encryption reserves, market warms up and cools down again: Will Cryptocurrency see a new direction?

Former U.S. President Donald Trump recently announced the establishment of the U.S. Strategic Crypto Reserve, triggering intense market Fluctuation. This move not only reignited confidence in Crypto Assets in the market, but also drew attention to the upcoming White House Crypto Summit this Friday.

The encryption market briefly warmed up and then quickly cooled down, with Bitcoin leading the rise.

Trump announced this Sunday (3/2) that the United States will establish a strategic encryption reserve, including major cryptocurrencies such as Bitcoin, Ethereum, XRP, Sol, and Cardano. He emphasized that this move will ensure that the United States becomes the 'world encryption capital,' contrasting sharply with the conservative stance of the Biden administration on regulation. In contrast to the Biden administration's strict control over the encryption market, especially in combating fraud and money laundering, Trump's declaration demonstrates a positive embrace of digital assets.

The market reacted enthusiastically to the news. According to Coingecko data, the global market value of Crypto Assets increased by about $300 billion within a few hours on that day. The prices of major Crypto Assets soared. Among them, the price of Bitcoin surged above $94,164, an 11% increase, making it the leader of this wave of growth. The prices of Ripple, Sol, and Ada coins also achieved amazing increases of over 33%, 22%, and 60% respectively, showing a brief market Fluctuation.

At the same time, the market is also closely watching the latest March non-farm payroll data to be released in the United States. In recent months, the U.S. non-farm payroll data has been strong, such as the addition of 353,000 jobs in January this year, far exceeding market expectations, indicating that the labor market remains robust. Such economic indicators typically affect investors' allocation of risk assets.

If the non-farm payroll data is lower than market expectations (such as new job additions less than 200,000), it may indicate an economic slowdown, prompting the Federal Reserve (Fed) to consider cutting interest rates, further driving up demand for risk assets such as Bitcoin and Ethereum. Interest rate cuts usually reduce the cost of capital, drive funds into risk markets, and enhance market expectations for future economic stimulus policies, which are generally positive catalysts for the cryptocurrency market.

On the contrary, if the data shows that the employment market remains strong (such as adding more than 300,000 people), the market may expect the Federal Reserve to maintain a tighter monetary policy, or even postpone the timing of interest rate cuts, thereby putting pressure on risk assets such as Crypto Assets. Strong employment data means that the economy is still overheated, and the Federal Reserve may choose to continue a high interest rate environment to curb inflation, which will lead to a decrease in market risk appetite, putting pressure on the prices of Bitcoin and other encryption assets.

In addition, market participants will also pay attention to changes in wage growth and unemployment, and if these data show that the labor market still has strong upward pressure on wages, it may strengthen the Fed's determination to maintain tightening policies and further affect the flow of funds in the market.

White House encryption summit: a barometer of future regulatory policies

Trump is planning to host the first White House encryption summit on Friday, March 7th, to further explain the details of the strategic reserve and may release more signals on regulatory directions. Market analysts generally believe that if the summit brings clearer regulatory policies, it will help eliminate uncertainty and further boost the market.

In this market frenzy, the performance of Ethereum is also attracting attention. As the second largest Cryptocurrency by market capitalization, Ethereum surged 13% to $2,516 due to its inclusion in strategic reserves. This not only enhances its market credibility but may also attract institutional investors. If the summit further releases positive news, the price of Ethereum is expected to continue rising; but if regulatory direction remains uncertain, the price may pull back.

Market sentiment and Dogecoin's volatility

Although Dogecoin has not been included in Trump's strategic encryption reserves, as one of the indicators of market sentiment, its price may still Fluctuation with market heat. Historically, Dogecoin's price has often moved in sync with major Cryptocurrencies. If Bitcoin and Ethereum continue to strengthen, Dogecoin's trend may also see an increase, and vice versa.

However, if the market becomes more conservative towards regulatory policies, or if investors' risk appetite decreases, the price of Dogecoin may come under pressure and fall back. Market sentiment will be a major factor affecting the future trend of Dogecoin.

Conclusion: Market confidence and regulatory policies will determine the future of Crypto Assets

Trump's strategic encryption reserve plan and the upcoming White House encryption summit bring temporary hope to the currently sluggish Crypto Assets market. In the short term, the market will continue to focus on the details of the summit, especially regarding regulatory direction.

Bitcoin, as the market leader, played a key role in the brief surge on Sunday, while Ethereum showed strong price performance in the short term due to its strategic reserve plan. As for Dogecoin, although it did not directly benefit, it may rise with the market's optimistic sentiment.

Furthermore, the changes in non-farm employment data will indirectly affect the encryption market. If the data shows a cooling of the US job market, the Fed may consider a rate cut, further driving the demand for risk assets such as Bitcoin and Ethereum. Conversely, if the job market remains strong, expectations of a rate hike may increase, potentially dampening the rise of Cryptocurrency.

Looking ahead, the growth of the encryption market will depend on the clarification of regulatory policies and the continued confidence of investors. If Trump's plan can bring about real policy changes, the market may usher in a new wave of bull market; but if regulatory issues remain unresolved, the future of the encryption market will still be full of challenges.

This article Trump announced a strategic encryption reserve, the market warmed up and then cooled down: Crypto Assets ushered in a new direction? First appeared in Chain News ABMedia.