TLDR
- President Trump’s Bitcoin-only Strategic Reserve decision caused XRP, DOGE, and ADA to drop up to 9% in 24 hours
- The market lost over $400 million in liquidations, with Bitcoin-tracked products accounting for $230 million
- Bitcoin fell from $93,000 to under $88,000 despite being the focus of Trump’s strategic reserve
- Traders’ optimism faded after earlier hopes that multiple cryptocurrencies would be included in the reserve
- Today’s White House Crypto Summit brings industry leaders together, but expectations for market-moving announcements remain low
Cryptocurrency markets tumbled after President Donald Trump announced that his strategic reserve plan would focus exclusively on Bitcoin. Major altcoins including XRP, Dogecoin (DOGE), and Cardano (ADA) saw their prices fall by up to 9% in the last 24 hours.
The sell-off came after Trump’s Thursday announcement clarified the scope of the Bitcoin Strategic Reserve. The plan will only hold Bitcoin that was previously seized by the government.
While the administration also plans a separate “crypto stockpile,” this will only include assets that the government happens to seize. This falls short of what many investors had hoped for.
Earlier this week, crypto markets rallied on speculation that Trump might include multiple cryptocurrencies in the strategic reserve. Previous comments had mentioned XRP, ADA, Ethereum, and Solana as possible inclusions.
Traders had anticipated that government purchases would create new demand for these tokens. The reality of a Bitcoin-only approach quickly reversed the market’s bullish sentiment.
Widespread Market Impact
Even Bitcoin couldn’t escape the downward pressure. Its price dropped 4.5% from a high of $93,000 to below $88,000 in the past 24 hours.
The broader crypto market felt the impact as well. The CoinDesk 20 index, which tracks the top cryptocurrencies by market value, fell 5% overall.
Smaller altcoins were hit the hardest. Many saw their prices drop by 10% or more as traders adjusted their positions based on the news.
The sudden price movement triggered a wave of liquidations in the futures market. Over $400 million in bullish bets were liquidated across crypto exchanges.
Bitcoin-tracked products bore the brunt of these losses. They accounted for $230 million of the total liquidations as leveraged traders were forced out of their positions.
Dogecoin had seen particular enthusiasm earlier in the week. Its price jumped 12% after NYSE Arca filed for approval of a DOGE exchange-traded fund (ETF).
Some DOGE supporters had hoped it might be included in the strategic reserve. Those hopes vanished with Trump’s Bitcoin-focused announcement.
All Eyes on the White House Summit
Market attention now turns to today’s White House Crypto Summit. The event brings together key players from the cryptocurrency industry and government officials.
Despite the high-profile nature of the gathering, traders have tempered their expectations. The market shock from the strategic reserve announcement has created a cautious mood.
“After the strategic reserve disappointment, traders aren’t expecting much from the summit,” said Nick Ruck from LVRG Research. “There’s still a risk-off sentiment in the market.”
The summit aims to discuss the future of digital assets in the United States. Topics include regulatory frameworks and the implementation of the strategic reserve.
Some observers hold out hope for surprise announcements. The presence of industry leaders and government officials could lead to unexpected developments.
Coinbase CEO Brian Armstrong has expressed support for clearer regulations. He believes that regulatory certainty could boost innovation and adoption in the crypto space.
Others are more cautious about government involvement. Bitwise CEO Hunter Horsley has highlighted the challenges of including various cryptocurrencies in a national reserve.
The summit represents a major step in the government’s engagement with the crypto industry. Officials hope to position the U.S. as a leader in digital assets.
The focus remains on balancing innovation with appropriate oversight. How this balance is struck could shape the crypto landscape for years to come.
While the summit’s discussions are important for long-term policy, traders are mainly focused on any announcements that might impact prices. After this week’s volatility, many are hoping for some stability.
The market reaction to Trump’s Bitcoin-only reserve highlights the sensitivity of crypto prices to government policy. Today’s summit may provide more clarity on the administration’s approach.
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