Trump's Crypto Reserve Spark: Billions in XRP, Bitcoin Flood Exchanges

Coin WorldWednesday, Mar 5, 2025 2:17 pm ET

1min read

Cryptocurrency markets witnessed a significant surge in exchange inflows following U.S. President Donald Trump's announcement of a U.S. crypto strategic reserve on March 2. Billions of XRP tokens and thousands of bitcoins were sent to exchanges shortly after the announcement, contributing to rapid price reversals.

On-chain analysis firm CryptoQuant reported that hourly inflows of XRP reached up to 193 million, with most of the flows coming from whales executing transactions of 1 million or more XRP. Meanwhile, hourly bitcoin inflows increased from 500-1,000 to a high of 6,739 BTC, and ETH inflows into exchanges spiked to almost 300,000 in an hour.

Inflows to exchanges from funds and traders usually imply an intention to sell, as large token holdings are typically stored in cold (or offline) wallets. However, CryptoQuant analysts noted that the rise and sudden fall of cryptocurrencies on Monday and Tuesday indicated that real spot demand continued to contract.

Analysts also pointed out that Bitcoin apparent demand growth has continued to decline after a period of acceleration in November-December 2024, spurred by the U.S. election results. Unless Bitcoin demand starts to increase again, sustaining a rally in crypto prices will remain challenging.

Trump's announcement of a U.S. crypto strategic reserve on Sunday, March 2nd, resulted in an increase in crypto prices, with the market cap growing over $300 billion. Bitcoin managed to recover from the past week's losses, climbing above the $92,000 mark early Monday. However, traders rushed to sell, flooding exchanges with 6,739 Bitcoin, $275 million in short liquidations, and wiping out $800 million from the market.

Investors bet on an ETF approval for XRP, forecasting an inflow of up to $8 billion to XRP ETFs if approved. The crypto market crash saw $112 billion wiped out, with Bitcoin, Ethereum, and XRP exchange inflows surging. Despite the market surge, Bitcoin ETFs saw net outflows double as optimism faded.

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