Traders react as bitcoin drops 8 percent and smaller cryptocurrencies tumble despite Trump's crypto reserve plan
Bitcoin’s rally lost momentum Monday as traders assessed the impact of upcoming tariffs, according to CNBC.
Concerns about the economic effects of these levies overshadowed the initial excitement surrounding former US President Donald Trump’s announcement of a US strategic crypto reserve.
Bitcoin fell 8 percent to the US$86,000 level, according to Coin Metrics, while ether dropped about 15 percent to US$2,100. Stocks tied to cryptocurrency also reversed direction.
Coinbase declined 4.6 percent, while Robinhood fell 6.4 percent.
MicroStrategy, which surged 14 percent at the market’s open, dropped more than 1.8 percent by Monday afternoon.
Over the weekend, Trump introduced the creation of a strategic crypto reserve, shifting from his previously promoted ‘bitcoin stockpile.’ He stated that the reserve would include ether, XRP, Solana’s SOL token, and Cardano’s ADA, in addition to bitcoin.
The announcement sent bitcoin as high as US$95,000, while smaller cryptocurrencies posted double-digit gains.
Investors welcomed the news, following a difficult week that saw bitcoin drop below the key US$90,000 level for the first time in three months.
At one point, it had fallen 25 percent below its January all-time high, raising concerns about a potential slide toward US$70,000. Smaller, riskier digital assets experienced even steeper losses.
However, bitcoin remained in a consolidation phase, with analysts warning that without a clear crypto-specific catalyst, macroeconomic concerns could continue weighing on the market.
“The effect of Trump’s [crypto reserve] comment will not continue,” said Yuya Hasegawa, a crypto market analyst at Japanese bitcoin exchange Bitbank. “The price may go up because of other developments this week, but Trump’s comment is already digested.”
Hasegawa also noted that “there was no particularly new [announcement],” adding that Trump’s statement did not mark the official establishment of the reserve but reaffirmed ongoing plans outlined in his January executive order on crypto.
Investors are watching for further developments on the reserve.
White House artificial intelligence and crypto czar David Sacks hinted at more details.
President Trump has announced a Crypto Strategic Reserve consisting of Bitcoin and other top cryptocurrencies. This is consistent with his week-one E.O. 14178. President Trump is keeping his promise to make the U.S. the “Crypto Capital of the World.” More to come at the Summit.
— David Sacks (@davidsacks47) March 2, 2025
He stated on X that there would be “more to come” at the first White House Crypto Summit, scheduled for Friday.
