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The Political Play Behind Trump’s Crypto Reserve
Plus, 📢 Trump’s big reveal, 🔥 Solana’s inflation debate, and ⚡Ethereum’s biggest shift in years.
Juan Aranovich
March 03, 2025
Welcome to the new week! In today’s edition:
🎰 Trader bets the farm… and wins
⏱️ Trump’s reserve reveal: Timing, timing
🔥 SOL’s supply model is up for debate
🔄 Ethereum Foundation: Changing of the guard
A multi-currency wallet that’s easy, quick, and secure? …That’s RockWallet! Discover how you can take control of your assets and feel confident in the digital economy.
By Tikta and Steven Ehrlich
An anonymous trader made a hefty profit by trading leveraged longs of bitcoin and ether ahead of U.S. President Donald Trump’s crypto reserve announcement on Sunday.
The trader deposited $5.6 million USDC to decentralized perpetual swaps platform Hyperliquid, then used it to fund 50x leveraged BTC and ETH positions, putting the total value of their position at more than $200 million.
Although the trader was briefly at risk of liquidation, they ended up making a profit of $6.8 million after Trump’s announcement sent crypto prices soaring.
The fact that the trader was able to make such a large profit in a single day by opening such a high-risk position led to some speculation that they had inside information.
However, Coinbase executive Conor Grogan put those rumors to bed after tracing the wallet’s onchain activity.
“I tracked this guy's wallet and it turns out he got his funds from phishing and is a Roobet whale,” Grogan said. “He also closed his longs before the Trump second announcement, missing out on tens of millions. Turns out he's just a gambler with stolen funds and not someone with inside info.”
Through Saturday, the crypto market was down 14% for the year to date.
Despite all the hype and promises from the Trump administration, the industry had been left disheartened by recent memecoin scandals and a lack of tangible progress by the U.S. government outside of the the Securities and Exchange Commission’s dismissal of several cases and the release of a somewhat vague executive order on Jan. 23.
But that disappointment got a reprieve. The White House announced last Friday that it would host its first-ever crypto summit on March 7, chaired by the administration’s artificial intelligence and crypto “czar,” David Sacks, and administered by the Executive Director of the President ‘s Working Group on Digital Assets, Bo Hines.
The news generated a buzz in the crypto community, as it promised to lay the groundwork for some of the goals outlined in the executive order, which is designed to “promote United States leadership in digital assets and financial technology while protecting economic liberty.”
But for a president who cares deeply about the stock market and sees its performance as a barometer of his success, the announcement of the summit appears to have fallen short. The market barely moved on the news.
That may be why Trump decided to reveal the first five tokens to be included in a future crypto reserve: bitcoin, ether, cardano, ripple, and solana.
But will the proposed reserve need more than just presidential pull to get off the ground? And to what extent will big federal token purchases create a temptation for insider trading?
A proposal to introduce a dynamic mechanism that adjusts SOL issuance based on staking participation rates has garnered support from Anatoly Yakovenko, a Solana co-founder and CEO of Solana Labs.
Yakovenko joins Solana’s head of staking, Ben Hawkins, in publicly backing the SIMD-0228 proposal, which has become a somewhat controversial topic of debate within the community.
The proposal would make SOL token issuance market-driven, and potentially reduce inflation by up to 80%. It was authored by Multicoin Capital’s Tushar Jain and Vishal Kankani, and Anza’s Max Resnick.
However, critics say that the proposal could disproportionately benefit large validators and institutional stakeholders. Some observers have also argued that increased emissions might create an inflationary spiral in which greater supply leads to price drops, further discouraging staking.
A validator signaling vote on the proposal has been set for epoch 753, which is expected on March 6. If it ends up passing, SOL emissions would drop from 4.5% annually to as low as 0.87%.
The Ethereum Foundation is adopting a new leadership structure, appointing researchers Hsiao-Wei Wang and Tomasz Stańczak as its co-executive directors.
The change comes as Aya Miyaguchi, the foundation’s former executive director, transitions to become its president following a chorus of calls for her to quit altogether.
Some of her critics questioned her technical expertise and her apparent dismissal of a "culture of competing and winning” at a time when Ethereum was losing out to rival blockchains.
The co-executive directors both come with several years of hands-on experience shaping core Ethereum initiatives. Wang is a seven-year veteran of the foundation’s research team, and Stańczak is the founder of major Ethereum execution client Nethermind.
Former researcher Danny Ryan, who many believed was a top contender for the foundation’s directorship, will instead lead a new marketing arm for the Ethereum ecosystem called Etherealize.
“We'll remember today as one of the most consequential turning points in Ethereum's history,” Ethereum core developer Tim Beiko said on X. “The last few months have been tumultuous. This week's announcements make me confident we've struck the right balance between these two extremes.”
Mantle is building the largest sustainable hub for on-chain finance. Launching three new core innovation pillars: Enhanced Index Fund, Mantle Banking and MantleX.
🚫 A U.S. federal judge on Friday dismissed the Securities and Exchange Commission’s fraud lawsuit against Hex and PulseChain founder Richard Heart, ruling that the agency had failed to establish jurisdiction over the Finland-based crypto entrepreneur.
🏛️ White House crypto “czar” David Sacks confirmed on Sunday that he had sold all his crypto holdings, including BTC, ETH, and SOL, before joining the Trump administration.
📈 Hyperliquid last week surpassed Pump.fun to become DeFi’s third-largest revenue generator, earning $12.6 million in trading fees over the week, fueled by extreme market volatility and the recent addition of spot BTC trading.
🤖 AI agent platform Virtuals Protocol has seen its daily revenue plummet 95%, dropping from a January peak of $1.1 million to just $35,000 as demand for AI-generated virtual agents dwindles despite the platform’s Solana expansion.
🌐 U.S. President Donald Trump’s attorneys last week filed a trademark for a Trump metaverse, proposing a virtual world featuring retail stores, educational programs, and digital collectibles, but restricting content only to what is authorized by Trump himself.
🏦 BlackRock allocated 1% to 2% of its model portfolios to its IBIT Bitcoin ETF for the first time.
📊 CME Group will introduce Solana futures on March 17, offering 25-SOL and 500-SOL contracts as growing demand for regulated crypto derivatives increases the likelihood of a future spot Solana ETF approval.
Binance former CEO Changpeng “CZ” Zhao’s “crazy idea for token issuance”
AI as the engine, humans as the steering wheel by Ethereum creator Vitalik Buterin
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