Crypto Market Plummets as Trump's Bitcoin Reserve Plan Disappoints Investors

Coin WorldFriday, Mar 7, 2025 2:27 am ET

1min read

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, which dampened hopes for a diversified U.S. strategic crypto reserve.

On Thursday, Trump directed his administration to establish a Bitcoin Strategic Reserve, which would hold bitcoin (BTC) previously seized by the government. Additionally, a "crypto stockpile" of other assets was mentioned, though it was clarified that this would only include cryptocurrencies seized by the government. This announcement reversed the bullish momentum that had been building over the past few days, fueled by Trump's earlier comments about including tokens like XRP, ADA, ether (ETH), and Solana’s SOL in the reserve. This development dashed hopes of buying pressure on these assets using taxpayer money.

DOGE, in particular, had spiked as much as 12% earlier in the week. This surge was partly due to asset manager Bitwise filing a 19-B for an exchange-traded fund (ETF) holding the token. Some traders had hoped that DOGE might be included in the strategic reserve, contributing to the initial optimism.

Bitcoin, the focal point of Trump's plan, also felt the impact, dipping 4.5% from a 24-hour high above $93,000 to under $88,000. The broader market, as tracked by the CoinDesk 20 (CD20) index, which follows the largest tokens by market capitalization, fell by 5%. Smaller altcoins saw even steeper declines, dropping as much as 10%.

This market slide triggered over $400 million in liquidations on bullish bets in crypto futures, with a significant portion of these liquidations stemming from BTC-tracked products at $230 million. Traders are now looking ahead to the White House Crypto Summit scheduled for the U.S. morning hours on March 7, though expectations for substantial announcements are low.

Nick Ruck, director at LVRG Research, noted that traders have lowered their expectations following the strategic reserve announcement, which failed to meet initial hopes. Ruck also mentioned that while there is still a risk-off sentiment, traders hold some

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