Crypto Market Plummets as Trump's Bitcoin Reserve Plan Fails to Boost Altcoins

Major cryptocurrencies XRP, Dogecoin (DOGE), and Cardano (ADA) experienced a significant decline, dropping as much as 9% within a 24-hour period. This downturn followed President Donald Trump's announcement that the U.S. would establish a Bitcoin Strategic Reserve, which would hold bitcoin (BTC) previously seized by the government, along with a "crypto stockpile" of other assets. The assets for the non-bitcoin stockpile would include any cryptocurrency that the government seizes in the future.

This announcement reversed the bullish momentum that had been building over the past few days, fueled by Trump's earlier comments about including tokens such as XRP, ADA, ether (ETH), and Solana’s SOL in the strategic reserve. The reversal dashed hopes of increased buying pressure on these assets using taxpayer money.

DOGE had previously spiked as much as 12% earlier in the week when NYSE Arca filed a 19b-4 with the SEC for approval of Bitwise's DOGE exchange-traded fund (ETF). Some traders had hoped that DOGE might be included in the strategic reserve, contributing to the initial surge.

Bitcoin, the central focus of Trump’s plan, also felt the impact, dipping 4.5% from a 24-hour high above $93,000 to under $88,000. The broad-based CoinDesk 20 (CD20), an index tracking the largest tokens by market capitalization, fell 5%, while smaller altcoins dropped as much as 10%.

The slide triggered over $400 million in liquidations on bullish bets in crypto futures, with a significant portion of that stemming from BTC-tracked products at $230 million. Traders are now looking ahead to the White House Crypto Summit scheduled for the morning hours of March 7, but expectations are low for any substantial announcements that could reverse the current sentiment.

“Traders have lowered expectations since the strategic reserve announcement failed to live up to expectations,” said Nick Ruck, director at LVRG Research. “Trump hasn't promised anything substantial for Friday's summit that could reverse the impact of the trade wars, so there is still a risk-off sentiment.”

Despite the disappointment, traders hold some