Finimize - 🇺🇸 The president's crypto fund

What’s going on here?

The US president revealed plans to build a strategic reserve of five digital currencies on Sunday, although it’s not yet clear exactly how the backup will be built.

What does this mean?

Doomsday preppers keep tins of beans and ammunition in their basements – in case of, say, a zombie apocalypse or nuclear war. Governments do something similar, holding “strategic reserves” that can be used if a supply breakdown or emergency threatens to wreak havoc. Usually, they hoard essentials like food, oil, and medical supplies. But the US seems eager to embrace the modern age: the president took to social media – naturally choosing Truth Social, his majority-owned platform – to announce plans for a crypto strategic reserve.

Why should I care?

Zooming in: There’s safety in numbers… sometimes.

While the president has previously floated a bitcoin stockpile, this is the first the world has heard of a broader collection – including ethereum, Ripple-linked XRP, solana, and cardano. Crypto purists seem skeptical, arguing that the national reserve should only hold bitcoin. It is the biggest and most stable coin, after all. But that’s nit-picking compared to the many who doubt the government should hold digital currencies at all. Either way, Uncle Sam could start the reserve with bitcoin previously seized from cybercriminals and darknet markets – rather than selling those assets to reimburse victims as it does now. That’s no small change: the US government currently holds around $18 billion worth of bitcoin.

For markets: So much for HODL.

The president waxed lyrical about crypto’s potential during his campaign. And investors piled into the coins – especially bitcoin – as a result, expecting crypto-friendly policies to be quick to land on the Oval Office desk. But, underwhelmed by the speed and scale of any policies, impatient investors started ditching their digitals. Now, this news has them one-eightying their one-eighties: crypto prices picked up again after the president’s announcement.

What’s going on here?

European defense stocks darted ahead on Monday, after the region’s leaders met for an emergency summit over the weekend to work on their self-reliance skills.

What does this mean?

Europe can no longer count on the States to furnish its front line, so the region’s governments seem set to lift their defense budgets. So much so, in fact, that policymakers are scoping out entirely new funding options – one of which could be to form a European rearmament bank: a centralized fund for military spending. Consider the message received by investors, who have been buying up related stocks – including Rheinmetall, BAE Systems, and Thales – all year. And they went in for seconds, thirds, and the rest on Monday, sending all of the stocks up by at least 10%.

Why should I care?

Zooming out: The price was right.

Investors haven’t stopped at defense: they’ve found Europe’s stocks hard to resist in general lately, drawn in by share prices that are far cheaper than US counterparts. Those bargain prices seem to have more than balanced out the threat of trade-penalizing tariffs – which could compromise the European economy – from the States. That’s what investors’ behavior suggests, anyway: the region’s stock markets have been some of the world’s best performers this year.

The bigger picture: The US might need to pay the price of tariffs, too.

The US president’s tariff tirade has unsettled investors, business leaders, and central bankers. They’re worried that the increase in costs will trickle into retail prices, risking a resurgence of economy-bruising inflation. Even Warren Buffett added his two cents, calling tariffs punitive measures that can hurt everyday consumers. That said, there is another side to the story: businesses may be tempted to move operations onto stateside soil to limit their levies. Carmaker Honda, for one, now plans to build its new plant in the US instead of Mexico, which should bring more money and jobs to the States.