As you may have heard, this has already been a big week for cryptocurrency. With the announcement from President Donald Trump on March 2 for plans to create a national cryptocurrency reserve, which is set to include Bitcoin (BTC 1.88%), XRP (XRP 1.67%), Solana (SOL 2.75%), and a couple of others, it's hard to see how there could be other big developments on the docket.
Nonetheless, there's a major catalyst event slated for March 7. Here's what investors should be looking out for, and why it matters for the coins you hold.
CRYPTO: BTC
Key Data Points
Regulators and industry will get a chance to mingle
March 7 will see the very first crypto summit to be hosted by the president, at the White House. Major investors, CEOs, politicians, and other notable members of the public will be in attendance, perhaps including financial regulators. The president will be making an address with prepared remarks.
This kind of event is fully unprecedented in the history of cryptocurrency, and it will doubtlessly move the crypto markets promptly and significantly if any major policies are announced or clarified. What's more, while volatility is guaranteed, it is very likely that new policy announcements will imply meaty changes to the industry's potential to grow. Of particular importance will be any elaboration on the size, distribution, or actual purpose of the cryptocurrency reserve, not to mention the legal or regulatory basis for implementing it as a policy. There will also be a back-and-forth process of determining how realistic the proposed reserve is in terms of the political aspects of its implementation.
One older proposal for the reserve calls for purchasing 5% of all outstanding Bitcoin supply over the next five years. Per that proposal, the coins would be held for at least 20 years. Such a proposal being implemented for Bitcoin, or a similar one being implemented for Solana or XRP, would likely result in a gargantuan move upward in the prices of these coins. And there isn't any guarantee such a move would be retraced, as the expectation would be that the government would hold for as long as it specified at a minimum.
In other words, these policies could easily become part of the investment thesis for why these assets are worth buying and holding forever.
There may be moments during the summit (or afterward) that tempt you to dump everything. Alternatively, there will probably be moments where you want to slam all of your remaining cash into buying coins. Resisting both of these temptations is important to preserving your portfolio's value over the long term, so prepare for it. This isn't the time to be actively watching the prices of your coins move from minute to minute. In fact, there is never such a time.
CRYPTO: XRP
Key Data Points
The long-term implications are positive, but far from fully clear
The fact that there's a crypto summit at the White House at all is a bullish sign for the industry. It supports the idea that Bitcoin, XRP, Solana, and the other assets that could be included in the reserve are serious investments that are worthy of getting some exposure to.
At the same time, it is very difficult for investors to plan around policies that haven't been elaborated on yet. And it's clear that many regulatory bodies overseeing the crypto sector are being shaken up right now, which makes the planning process even harder. Likewise, there is a real possibility that the new regulations will not be received well by financial institutions. If that happens, they may not buy as much of these coins as they would have otherwise.
Still, there's not much point in speculating at the moment, either in the financial sense or the narrative sense. Nor is there much reason to sell your holdings. It might even be acceptable to load up on a bit more of the smaller coins under consideration for the reserve, particularly Solana. After all, the leadership of fairly centralized chains like Solana and XRP will have a chance to talk directly to policymakers and senior administration leaders at the summit, which could influence any subsequent regulations significantly in their favor.
Keep a close watch for announcements coming out of this summit, as well as in the days leading up to it. Even if the summit doesn't trigger the melt-up that investors are hoping for, there will certainly be a lot of discussion about the future of cryptocurrency, and that'll affect your holdings, as well as your intuitions about where to invest in the future.
