Disappointment in Crypto Markets Following Trump’s Reserve Announcement

Published on March 7, 2025, 7:21 a.m. UTC
Updated: March 7, 2025, 9:18 a.m. UTC

The cryptocurrency market is feeling the sting of disappointment as traders react to President Donald Trump’s recent announcement regarding the U.S. strategic crypto reserve. Major tokens including XRP, Dogecoin (DOGE), and Cardano (ADA) saw significant declines—some plummeting as much as 9%—after Trump made clear that his strategic reserve plans would not introduce any immediate buying pressure into the market.

Strategic Crypto Reserve Announcement

On Thursday, March 6, President Trump directed his administration to create a Bitcoin Strategic Reserve. This initiative aims to hold Bitcoin (BTC) previously seized by the government alongside an additional “crypto stockpile” made up of other seized assets. However, the announcement has failed to meet traders’ expectations, particularly those who were hopeful of diversified token reserves including XRP, ADA, ether (ETH), and Solana (SOL).

In the days leading up to the announcement, there had been buoyant market momentum, much of it fueled by speculation about increased state involvement which was expected to inject substantial liquidity into the market. Instead, Trump’s admissions have quashed those expectations, dampening hopes for taxpayer-funded buying pressure on a range of crypto assets.

Market Reaction

In the aftermath of Trump’s announcement, Bitcoin dipped by 4.5%, falling from a 24-hour high of more than $93,000 to below $88,000. CoinDesk’s 20 (CD20)—an index that tracks the largest cryptocurrencies by market capitalization—also saw a decrease of 5%, while smaller altcoins experienced drops of up to 10%. This downward trend has resulted in over $400 million in liquidations of bullish positions in crypto futures, with the bulk of those liquidations coming from BTC-tracked products—amounting to around $230 million.

Dogecoin, which had previously surged by 12% following positive news regarding NYSE Arca’s filing for a DOGE exchange-traded fund (ETF), also succumbed to the market’s downturn. Traders had speculated that DOGE might find its way into the government’s strategic reserve, further feeding its earlier gains.

Outlook and Future Expectations

Looking ahead, traders are now focusing on the White House Crypto Summit scheduled for later today. While the event is anticipated to bring key industry leaders and government officials together, many traders are tempering their expectations.

“Traders have lowered expectations since the strategic reserve announcement failed to live up to their hopes,” explained Nick Ruck, director at LVRG Research, in a message shared with CoinDesk. “Trump hasn’t promised anything substantial for Friday’s summit that could reverse the impact of the trade wars, hence the prevailing risk-off sentiment.”

Despite the bearish outlook, Ruck noted that some traders still harbor hope for potential surprise announcements between Trump and individual blockchain companies during the summit, which may include discussions on future strategies for the crypto industry.

As the market awaits further developments, participants in the cryptocurrency space remain cautious, reflecting on the current volatility and uncertain future in the wake of the latest announcements.

About the Author
Shaurya Malwa serves as the Co-Leader of CoinDesk’s tokens and data team in Asia, focusing on various aspects of the crypto market including derivatives, DeFi, and protocol analysis. With extensive experience in the field, Shaurya provides insights that help keep investors informed in this rapidly changing environment.