Podcast Notes | What Does the U.S. Strategic Reserve Mean for the Crypto Industry and Retail Investors?
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Podcast Notes | What Does the U.S. Strategic Reserve Mean for the Crypto Industry and Retail Investors?
"Trump's impact on the market is significant. I learned from his first term: don't act against Trump's tweets and statements."
Navigating Web3 tides with focused insightsCompiled & Translated by: TechFlow
Guests: Jonah Van Bourg, crude oil & crypto trader; Avi Felman, host of the 1000x Podcast
Source: 1000x Podcast
Original Title: What A U.S Strategic Reserve Means For Crypto?
Air Date: March 4, 2025
Key Takeaways
This episode primarily discusses the following points:
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Market Volatility and the U.S. Crypto Strategic Reserve
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Bitcoin price experienced significant volatility, dropping nearly 20% before rebounding 18–19%
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Trump’s announcement of a U.S. crypto strategic reserve triggered a short-term market rally
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The reserve will include multiple cryptocurrencies such as Bitcoin, Ethereum, XRP, and Cardano
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If the strategic reserve is only $500 million in size, Bitcoin could quickly fall back to the $80K range
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Technical Analysis and Trading Strategy
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Bitcoin often declines after prolonged sideways movement at high levels
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Capital inflow data shows this rebound was primarily driven by spot buying rather than leveraged positions
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Hedging strategies (e.g., going long on certain altcoins while shorting BTC) have performed well in the current environment
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Bitcoin below $80K is seen as an "extreme value" zone, whereas consensus around value at $95K has not yet formed
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Trump's Impact on Markets
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Trump has historically influenced markets significantly through tweets and public statements
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The "Trump effect" on crypto markets is gradually weakening
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The upcoming crypto summit on Friday may be a key catalyst for near-term market direction
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Government crypto purchases may require congressional approval, making legislative progress critical
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Ethereum Underperformance
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ETH/BTC ratio continues to decline, with Ethereum significantly underperforming Bitcoin
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Ethereum faces strong selling pressure and lacks buyer support
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Major sellers include the Ethereum Foundation and investors who entered the market in 2021
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Outlook for Future Markets
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Short-term markets may remain chaotic and unsuitable for short-term trading
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Long-term bullish on Bitcoin, potentially reaching $150K–$200K within the year
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Legislative progress in Congress will be a key market driver
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Democrats are softening their stance on crypto, recognizing they previously missed opportunities to embrace the industry
Impact of the Strategic Reserve on the Market
Avi:
The recent market has been absolutely wild. After four consecutive days of decline, Bitcoin paused for one day, then plunged 10% on the fifth day, and now it’s up 15%. From the low point, it’s risen about 18–19%, yet we’re still hovering around $93K—nowhere near the previous range. This is insane.
Jonah:
What happened? Was there any major news?
Avi:
I mentioned last week that it’s rare for Bitcoin to trade sideways at high levels without breaking down. I didn’t expect a straight four-day 20% drop—I thought it would be more volatile. I turned bullish when prices hit the mid-to-low $80K range, and then we saw a final shakeout down to $78K, which actually benefited Bitcoin. Many investors waiting for sub-$80K finally got their chance with massive volume, and the price reversed so fast that those waiting couldn’t even enter.
Those who sold were likely panicked investors—people who still want to hold Bitcoin but feared a further drop into the $60K range. Technically, our market structure looks solid, not to mention the recent presidential announcement about a crypto strategic reserve. What’s going on with that?
Jonah:
I held my position throughout the entire downturn, just observing. I tweeted less, maybe showed some panic, but wasn’t too worried because I didn’t think it would collapse. This was completely unexpected—I assumed the market would rise steadily as regulatory conditions improved.
I don't believe this crypto news alone will spark a new bull run. We probably won’t see only upward momentum over the next six months. I think it might sell off for a while, find a bottom, and then resume its climb. There’s also the crypto summit on March 7.
Avi:
I think this private summit is similar to other Trump-related catalysts. When he spoke at the Bitcoin conference, we first surged, then sold off. Many are excited about the strategic reserve idea. I must say, this is genuinely big news—especially for Solana, XRP, and Cardano, since Trump directly named them. Mentioning Cardano is particularly surprising.
Jonah:
It’s not that strange, actually. If you check CoinGecko’s rankings of top non-stablecoin cryptos, you’ll see: Bitcoin, Ethereum, XRP (love it or hate it, this “air project” has nearly a $300B market cap), then Tether, BNB (but that’s Chinese, and Trump dislikes China), then Solana, USDC, and finally Cardano at $50B. After that come Doge and a bunch of others. To be honest, isn’t this just the top cryptos excluding Chinese ones?
Avi:
You make a fair point, but I do think if the government is going to buy crypto, it should focus on projects with real utility and future potential. It’s a weird argument, because we should step back and ask: why would the government buy useless projects with no real users, future, or intrinsic value? Don’t they do any research?
Jonah:
I completely agree, Avi. Cardano represents everything that makes both of us want to quit crypto. If Trump wants to send the right message, he should say: we’re creating a strategic crypto reserve primarily in Bitcoin, with some Ethereum and Solana due to traction, and perhaps include XRP and Cardano because of their large market caps.
But how can you justify cutting funding for American scientific institutions, claiming the country is going bankrupt, while simultaneously spending taxpayer money on Cardano? That’s hard to defend.
Avi:
There are two paths for price increases. Unless the crypto summit on Friday announces that the U.S. will allocate tens of billions to Bitcoin, we won’t sustain higher prices. That’s the threshold: in the next seven days, will we get details confirming the U.S. will commit tens of billions? If the strategic reserve is only $500 million, we’ll quickly fall back to the $80K range.
Jonah:
If they announce that, it’ll make their entry price look terrible. That would be insane. I wonder if they’re really that foolish. Given how poorly the messaging has been handled, the answer might be yes—they truly are that clueless.
Bitcoin: Value and Momentum
Jonah:
Last Friday, S&P 500 futures dropped sharply, marking the largest decline since 2025. While the stock market has seen similar volatility in 2024, overall instability has increased. In contrast, Bitcoin did not crash like the S&P 500 and instead showed relative resilience.
Avi: I’ve always used the value & momentum framework. Right now, investors need to rediscover Bitcoin’s value—and I believe that’s already happening. The market widely views sub-$80K as an extreme value zone for Bitcoin, which is why we didn’t stay below $80K for long. The narrow trading range around $95K isn’t seen as valuable, so there’s insufficient buying interest.
Momentum mainly comes from news catalysts. If Trump announces large-scale Bitcoin purchases by the U.S., that creates immediate upward momentum. Otherwise, we rely on value support. How is value perception built? By sustained trading activity within a specific price range over time.
Right now, $85K isn’t seen as deeply attractive because we just traded there. But if we stabilize above $90K for two months and then pull back to $85K, that level suddenly becomes a “discount,” making it far more appealing.
Currently, the clear value zone is below $80K—you can confidently buy Bitcoin there, and I believe you’ll be happy with that decision a year from now. Of course, that also means you might never get that chance. But I also don’t consider $95K a value zone. So absent major positive news, I expect us to trade between $85K and $95K for at least a month.
Jonah:
I agree with some of your points but not others. I agree traders anchor to price levels where assets consolidate for extended periods. If we trade around $100K for three months, participants will anchor there. Then $80K looks cheap, and $120K triggers profit-taking.
However, saying crypto rarely avoids sell-offs after consolidating at highs feels somewhat misleading. Essentially, you're saying: crypto goes up, stops rising, and then either keeps rising or falls. If it doesn’t keep rising, it falls. That’s almost tautological.
The Trump Effect: Policy Announcements and Market Reactions
Avi:
I recall we once discussed how Trump’s influence on Bitcoin resembles Musk’s impact on Doge. Initially, everyone bought Doge anticipating Musk might tweet something supportive. Now that Trump has adopted Bitcoin as his pet project, it’s the same pattern. This dynamic has played out clearly, and we’re now entering the next phase—each time he mentions crypto, the impact diminishes slightly. He needs to take real action now.
Notably, we knew as early as February 28 that the first White House crypto summit was coming the following week, yet the crypto market was collapsing. I wish I’d realized: Trump is highly likely to do something to ensure the summit doesn’t appear like a total failure. Going forward, it’s worth checking the White House schedule—whenever trading any asset, consider whether Trump has political incentives to help or hurt that trade.
Jonah:
That’s a great point comparing Trump and Musk’s market influence. From trading during Trump’s first term, I learned one crucial lesson: never trade against Trump’s tweets and public statements.
During his first term, Trump had enormous market influence. During the pandemic, when oil prices were low, he claimed he’d force OPEC to cut production, causing oil to surge 30–40% in a single day—an extremely rare move for a commodity. When prices were high, he publicly pressured OPEC to stop cuts, and they complied. He wanted oil within a certain range, so he made bearish comments at the top and bullish ones at the bottom. For stocks, he constantly tweeted bullish messages—“all-time highs,” “going even higher,” “more Trump tax cuts,” “the Trump effect,” etc.
You saw the sharp rebound in crypto after his strategic reserve tweet. My point is, that rally has already occurred. I don’t think he’ll release some brand-new, super-bullish surprise on Friday pushing prices up another $10K. That kind of tweet happens once—and it already happened today.
I remain very bullish on crypto. I think we could easily reach $150K by year-end, maybe even $200K. If I were a short-term trader, I might sell Bitcoin here and buy back at $87K, but that’s not my style.
Democrats and Crypto Policy
Avi:
Democrats are beginning to wake up to crypto. At least two people within the Democratic party have reached out to me, discussing writing an op-ed on how Democrats mishandled crypto, because they now realize crypto largely emerged from the Occupy Wall Street movement, which was entirely a Democratic-aligned cause.
Fifteen years ago, the anti-big-bank sentiment was exclusively Democratic. Distrust of financial institutions, Goldman Sachs, JPMorgan—this mindset belonged entirely to Democrats. They had a real opportunity. That’s why, if you trace Ethereum’s origins, many key figures—even today—are Democratic supporters. Bitcoin may have leaned more libertarian, but if Democrats had embraced it instead of trying to crush it, they could have succeeded in crypto.
I think they’re starting to realize this now. So I believe they’ll soften their stance, because it’s simply not a winning political issue for them anymore.
Ethereum’s Poor Performance
Avi:
Ethereum is performing terribly. ETH trading at $2,430 is simply unacceptable.
Jonah:
Exactly. I won’t touch Ethereum in the near term.
Avi:
Honestly, I recently tried a strategy: going long on altcoins while shorting BTC. It worked quite well. Many altcoins have already bottomed relative to Bitcoin, especially AI-focused coins I’m heavily invested in—like ARC, Virtuals, AI16, and AIXBT. These have performed strongly against Bitcoin recently. I’ve also built a significant long position in SOL as a BTC hedge. But I basically had to liquidate all my ETH/BTC exposure.
Jonah:
ETH/BTC has been awful. What’s going on?
Avi:
Man, I had to dump it. I kept every other position, but cut this one within 24 hours of opening because ETH failed to perform even during market turbulence. Most shocking is how few buyers there are. I thought sellers were exhausted—that part I may have gotten right—but I completely misjudged—this asset has zero buyers.
Jonah:
On top of that, there are massive sellers—the Ethereum Foundation, and everyone who entered crypto in 2021 and hasn’t checked their portfolio until now. Ethereum has been trading heavily.
Observations on Cardano
Avi:
Interestingly, Cardano is actually held by very ordinary people. Trump may be trying to appeal to the average person—he wants everyday Americans holding crypto to get rich. Many regular Americans do own Cardano. Today I spoke with someone who said, “You know crypto, right? I’ve held some Bitcoin and Cardano for four years—what should I do?” I told him he should definitely sell Cardano and switch to something else, because today is a great day to sell it. But yes, ordinary people do hold Cardano.
Market Funding Structure Analysis
Avi:
One positive sign is that this rally occurred without a significant increase in open interest (OI). In futures, one of the most reliable reversal signals is heavy leveraged entry. This rally appears spot-driven—people participated with cash, not just speculators using leverage. That’s a very healthy signal for Bitcoin.
Jonah:
There’s another explanation—it could be spot buying, which explains flat OI, or it could be heavy inter-market maker transactions without real position-building, just high-frequency trades bouncing off each other due to volatility.
Avi:
Looking at funding rates, there was indeed a notable influx of shorts on Saturday. One of life’s biggest edges is staying attentive over weekends. It’s easy to monitor things during weekdays and completely ignore them on weekends, but if you stay observant, you gain a huge advantage. Over the past year, many pivotal market events have occurred on weekends.
Outlook for Future Markets
Jonah:
I think this market will remain messy for a while. I don’t believe it’s a good environment for short-term traders with 2–7 day horizons. I feel more uncertain about the short term than ever, more confident about the long term than ever, and 6–8 out of 10 confidence that we’ll be higher six months from now.
Aside from tactical opportunities—like trading news before prices move, or reacting to slower-moving assets—I don’t think this is a market you want to actively trade. Once we gain clearer understanding of the Trump administration’s crypto monetary policy, the market will enter a healthier, more stable trading environment.
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