Cryptocurrency Market Sees Sharp Declines Following Trump’s Reserve Announcement
The cryptocurrency market experienced significant volatility on Monday, March 4, 2025, following US President Donald Trump’s proposal for a national strategic reserve of cryptocurrencies. Bitcoin initially surged 2.4% to $86,292 but later dropped 8% from Sunday’s levels. Other major cryptocurrencies followed a similar trend, with Ether falling 4.3% from Friday and 16% from Sunday. XRP plummeted 15%, Solana slid 16%, and Cardano dropped 19% from Sunday’s peak.
Trump’s January executive order on digital assets laid the groundwork for the reserve, but his Sunday announcement on Truth Social was the first time he specified the cryptocurrencies to be included: Bitcoin, Ether, XRP, Solana, and Cardano. The lack of detailed information about the proposal left the market cautious.
Market Reactions and Concerns
Anthony Pompliano, CEO of Professional Capital Management, expressed skepticism about the proposal in a letter to investors, calling it “a random smattering of speculative tools” that could benefit insiders at the expense of US taxpayers. Crypto exchange founders Cameron and Tyler Winklevoss also raised concerns, arguing that bitcoin is the only cryptocurrency that meets the criteria for a reserve asset.
The proposed reserve has sparked debate about its potential impact. Supporters argue it could help the US hedge against financial risks and diversify government holdings, similar to the Strategic Petroleum Reserve. Critics, however, point out the high volatility of cryptocurrencies and the potential risks of using taxpayer funds.
Trump’s Five Chosen Cryptocurrencies
- XRP: Created by Ripple, XRP is the third-largest cryptocurrency with $140 billion worth of tokens in circulation. Ripple has positioned XRP as a fast, low-cost method for global transactions.
- Solana (SOL): Solana is often used for meme coins and NFTs. Trump’s own cryptocurrency, launched in January, is based on Solana.
- Cardano (ADA): Founded in 2015 by Charles Hoskinson, a co-founder of Ethereum, Cardano has $31.4 billion worth of ADA tokens in circulation.
- Bitcoin: The largest cryptocurrency, with a market value of $1.7 trillion, accounting for more than half of the $3 trillion crypto market.
- Ether (ETH): The second-largest digital asset, Ether is the cryptocurrency of the Ethereum blockchain, which supports decentralized finance (DeFi) applications.
What’s Next?
Further details about the strategic crypto reserve may emerge at Friday’s White House Crypto Summit, where Trump is expected to meet with industry leaders. Until then, investors are waiting for clarity, and the broader crypto market is likely to remain volatile.
Kathleen Brooks, research director at XTB, noted the irony in bitcoin’s dependence on US government policies, stating that the cryptocurrency—designed to be decentralized and independent of government control—is now tied to regulatory decisions.
