A day after a surge in cryptocurrency prices driven by optimism surrounding Donald Trump’s proposed US Crypto Strategic Reserves, the market experienced a sharp downturn, erasing $300 billion in value. Bitcoin tumbled nearly 10%, while major altcoins such as Ethereum (ETH), Solana (SOL), and XRP recorded losses exceeding 15%.
Crypto Market in Turmoil
The steep decline was triggered by Trump’s decision to impose heavy tariffs on China, Mexico, and Canada, unsettling financial markets and prompting a global sell-off. Investor concerns, already heightened by regulatory uncertainty surrounding Trump’s crypto reserve initiative, deepened in response to the broader economic instability.
As of 12:41 pm, Bitcoin was trading at $84,119.28, with a market capitalization of $1.67 trillion and a 24-hour trading volume of $76.75 billion. In just 24 hours, BTC had dropped 9.47%, falling from a peak of $93,600 to a low of $83,300.
Other leading cryptocurrencies also witnessed significant losses:
- Ethereum (ETH): Down 11%
- Solana (SOL): Declined 15%
- XRP: Fell 12%
- Cardano (ADA): After being Monday’s top gainer, it suffered the steepest drop, plummeting 20% to around $0.80, according to CoinMarketCap data.
Stock Market Also Feels the Impact
The overall cryptocurrency market capitalization slumped by 10%, now valued at $2.77 trillion, reversing the gains made earlier in the week. This decline coincided with a downturn in traditional financial markets. The S&P 500 lost 2%, while the Dow Jones shed 650 points in the final trading hours of Monday. The losses were fueled by Trump’s aggressive trade policies, which included a 25% tariff on imports from Mexico and Canada, as well as a doubling of tariffs on Chinese goods to 20%.
China retaliated swiftly, announcing counter-tariffs of 10%-15% on select US imports, effective March 10. The escalation of trade tensions reignited fears of a global economic slowdown, prompting investors to offload stocks and digital assets amid growing uncertainty.
Did Trump’s Crypto Strategy Trigger a ‘Pump-and-Dump’ Scenario?
Despite positioning himself as a pro-crypto leader, Trump’s recent policy decisions have sparked concerns over potential market manipulation. Some analysts argue that his announcement of the US Crypto Strategic Reserves artificially inflated the market, creating an opportunity for early investors to profit before the subsequent crash.
Economist Peter Schiff openly criticized the developments, calling it “the biggest crypto pump-and-dump scheme of all time.” He further demanded a Congressional probe, stating, “An investigation is necessary to determine whether insiders exploited Trump’s strategic crypto reserve announcement for massive gains.”
Bitcoin, which briefly surged past $94,000 after Trump’s announcement, has since erased all its gains and is now trading well below pre-announcement levels.
Industry Reaction
With the market experiencing extreme volatility, industry leaders have expressed their concerns about the impact of these policy shifts on the crypto sector.
Rajkumar Sharma, President of AICRA, weighed in on the situation, stating, “The sudden surge and collapse in crypto markets highlight the vulnerability of digital assets to policy changes and external economic factors. While institutional interest in crypto remains high, unpredictable government policies can lead to excessive volatility. It is imperative for regulators and industry stakeholders to establish a balanced framework that ensures market stability while fostering innovation.”
As investors brace for more turbulence, the long-term impact of Trump’s policies on the cryptocurrency market remains uncertain. If regulatory approval for the US Crypto Strategic Reserves faces significant obstacles, further market fluctuations could be on the horizon.
