In the past 24 hours, major cryptocurrencies such as XRP, Dogecoin (DOGE), and Cardano (ADA) have experienced significant declines of up to 9% following President Donald Trump’s announcement regarding a proposed U.S. Strategic Crypto Reserve. This announcement has disrupted the bullish momentum that had built up in the preceding days.
On Thursday, Trump directed his administration to establish a Bitcoin Strategic Reserve aimed at holding Bitcoin (BTC) seized by the government while also creating a non-Bitcoin crypto stockpile comprised of other cryptocurrencies that may be confiscated in the future. This move effectively dashed hopes for a diversified approach that would have included altcoins such as XRP, ADA, Ether (ETH), and Solana’s SOL, surprising many in the cryptocurrency community who anticipated a more inclusive strategy.
Earlier this week, DOGE saw a spike of up to 12% following the filing of a 19-B submission by asset manager Bitwise for a potential exchange-traded fund (ETF) that would include the token. Some traders were optimistic that DOGE might find its way into the proposed strategic reserve, contributing to its upward movement. However, following Trump’s latest announcement, this optimism quickly faded.
Bitcoin, the focal point of Trump’s proposed reserve, has also not escaped the downturn, witnessing a drop of 4.5% from a 24-hour high exceeding $93,000 to below $88,000. The overall market was affected as the CoinDesk 20 (CD20), an index that tracks the largest tokens by market capitalization, fell by 5%, with smaller altcoins suffering losses of as much as 10%.
The market’s reaction was swift, triggering over $400 million in liquidations of bullish bets within crypto futures markets, largely attributed to liquidation in Bitcoin-focused products totaling around $230 million.
Looking ahead, traders are setting their sights on the upcoming White House Crypto Summit scheduled for March 7, although expectations for any groundbreaking outcomes remain low. According to Nick Ruck, director at LVRG Research, “Traders have lowered expectations since the strategic reserve announcement failed to meet earlier hopes. Trump hasn’t committed to any significant announcements for Friday’s summit that could potentially alter the current risk-off sentiment.”
Ruck went on to share a glimmer of hope among traders for unexpected announcements arising from conversations between Trump and various blockchain companies participating in the summit. With multiple industry leaders and key government department heads set to attend, there remains a small chance for positive developments that could shift market sentiment.
