Cardano, Ripple, and Solana Plunge 21%, Erasing Gains From Trump’s Crypto Strategic Reserve Announcement
Major cryptocurrencies, including Cardano (ADA), Ripple (XRP), and Solana (SOL), saw a sharp decline of 21% on Tuesday, completely reversing the gains spurred by President Donald Trump’s recent announcement regarding the creation of a U.S. crypto strategic reserve. The selloff highlights the volatile nature of the cryptocurrency market, as initial optimism quickly gave way to profit-taking and broader economic concerns.
A Brief Surge Followed by a Rapid Decline
Trump’s declaration on Sunday that the U.S. would establish a national crypto reserve, including ADA, XRP, and SOL alongside Bitcoin (BTC) and Ethereum (ETH), ignited a market frenzy. Within hours, ADA surged over 60%, XRP climbed 33%, and SOL experienced a 22% jump as investors rushed to capitalize on what was perceived as a bullish endorsement of digital assets by the U.S. government.
Many analysts initially viewed the announcement as a game-changer. The proposed government-backed crypto stockpile was expected to legitimize digital assets further, encouraging institutional adoption and providing long-term stability to the market. However, despite the promising outlook, traders reacted swiftly to take profits, leading to a sharp reversal in prices within just 48 hours.
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Macroeconomic Factors Add to the Market Downturn
The rapid decline was not solely driven by profit-taking. Broader economic uncertainties, particularly Trump’s latest round of tariff announcements, exacerbated the risk-off sentiment among investors. On Monday, the U.S. president confirmed that tariffs on imports from China would be doubled to 20%, while a 25% tariff would be imposed on goods from Canada and Mexico, effective immediately. These moves contributed to heightened market anxiety, not only in equities but also in cryptocurrencies, which are often treated as high-risk assets.
Kevin Guo, director of HashKey Research, emphasized that despite pro-crypto deregulation initiatives and supportive policies, investors continue to view digital assets as risk assets, making them highly sensitive to macroeconomic developments. “Trump’s latest tariff announcements on Canada, Mexico, and China triggered a massive selloff in the crypto market, completely reversing gains from the initial excitement surrounding the strategic reserve plans,” Guo noted in a message on Telegram.
The Ripple Effect on the Broader Crypto Market
As ADA, XRP, and SOL suffered sharp losses, other major cryptocurrencies also felt the impact. Bitcoin (BTC), which had reached as high as $92,000 over the weekend, tumbled 9% in the past 24 hours, trading at $84,000 as of Tuesday afternoon in Asian markets. Meanwhile, Ethereum (ETH) plunged 12%, now hovering just above $2,000—its lowest level since 2023.
The downturn extended beyond just the leading digital assets, with mid-cap and small-cap tokens also facing heavy selling pressure. The sudden shift in market sentiment demonstrates how quickly investor enthusiasm can fade in the face of macroeconomic uncertainty and policy changes.
Looking Ahead: The White House Crypto Summit
Despite the current turmoil, all eyes are now on the upcoming White House Crypto Summit scheduled for Friday. The event is expected to provide further details on the strategic reserve initiative, with industry leaders, policymakers, and analysts closely watching for clarity on the U.S. government’s long-term approach to digital assets.
Investors are bracing for potential volatility depending on the outcomes of the summit. If the administration provides concrete plans to integrate cryptocurrencies into the national financial framework, it could restore confidence and trigger another rally. However, if ambiguity persists or if further regulatory constraints are hinted at, the market could experience continued downward pressure.
Conclusion: A Market in Flux
The cryptocurrency market remains as unpredictable as ever, with sharp price movements reflecting the intersection of government policies, macroeconomic factors, and investor sentiment. While Trump’s proposal for a U.S. crypto strategic reserve initially sparked enthusiasm, the subsequent market reaction underscores the importance of long-term stability and clarity in regulatory approaches.
As the week progresses, traders and institutional investors will be closely monitoring any new developments from Washington, with the hope that clearer guidance will help stabilize the market. Until then, volatility is likely to remain a defining characteristic of the crypto space.
