A U.S. crypto strategic reserve appears more likely after President Trump’s announcement over the weekend, Wall Street bank Citi (C) said in a research report on Monday.
The President announced that XRP, solana (SOL) and cardano (ADA) would be included in a strategic reserve, and later added bitcoin (BTC) and ether (ETH) to the list of assets.
“The announcement of further plans for the U.S. government potentially to become a strategic holder of digital assets would add to the perceived legitimacy” of the asset class, wrote analyst Alex Saunders.
Citi noted that the U.S. government currently holds about $19 billion in cryptocurrencies, mainly in bitcoin, versus $750 billion in gold.
The large majority of the government’s holdings from seizures are in bitcoin, which means that is likely that the accumulation of other digital assets would be funded by open-market buys, the report said.
Still, “selection criteria are not currently clear,” and pre-announcing such investments can move prices against an investor, the bank said, adding that this happened to the U.K. government with gold in the late 1990s.
Additional clarity on the selection criteria for which tokens are to be included in the reserve would provide more support, the bank said.
Broker Bernstein said the Federal Reserve could issue debt or sell some of its gold reserves to fund cryptocurrency purchases, in a report last month.
Read more: U.S. Crypto Task Force to Focus on Delivering National Bitcoin Reserve: Bernstein