SINGAPORE: Bitcoin and other cryptocurrencies saw a sharp rise on Monday after U.S. President Donald Trump revealed that they would be part of a new U.S. strategic reserve.

Trump shared the news on Truth Social, saying his executive order from January would establish a stockpile of digital currencies. This reserve will include bitcoin, ether, XRP, solana, and cardano, the names that had not been disclosed before. He emphasized that bitcoin and ether will be at the core of this reserve.

Following this announcement, bitcoin jumped more than 20% from last week's low, reversing its downward trend since mid-January. On Friday, it was trading at $78,273, but by Monday, it had climbed to around $94,154. Ether also gained about 20% over the weekend, reaching $2,482, while XRP rose by 38%, solana by 20%, and cardano by 78%.

Chris Weston, head of research at Australian brokerage firm Pepperstone, described Trump's statement as a "positive shock" for the crypto market. He said it gave the market a much-needed boost during a time of decline. He also suggested that the rally could continue until Friday when Trump is set to host the first White House Crypto Summit. However, he warned that weakness in other markets might affect investor confidence.

Bitcoin had been struggling recently, especially after a major selloff in big tech stocks like Nvidia. In February, bitcoin dropped over 17%, its biggest monthly loss since June 2022. Since reaching a peak of $105,000 in early January, it has lost more than a third of its value.

The cryptocurrency market had initially surged when Trump won the November election, as many believed he would support digital assets and create a strategic bitcoin fund. However, apart from appointing some crypto-friendly officials, Trump had not made any major policy moves—until now.

While Trump's announcement has sparked excitement, some analysts warn of potential issues. IG market analyst Tony Sycamore pointed out that funding for the reserve could come from taxpayer money or from cryptocurrencies seized by law enforcement. If it’s the latter, it may not be as positive as it seems, since it would be more of a transfer rather than fresh buying activity.