Trump’s Crypto Strategic Reserve: Market Surge, Crash, and What’s Next

A summary of the recent coverage on US President Donald Trump's announcement about creating a strategic crypto reserve. The cryptocurrency market has seen its fair share of turbulence, but few events have triggered as dramatic a rollercoaster as President Donald Trump’s announcement of a U.S. Crypto Strategic Reserve. Initially heralded as a game-changer for digital assets like Cardano (ADA), Ripple (XRP), and Solana (SOL), the move sent these altcoins soaring—only to crash later, in some cases nearly wiping out all gains. The sharp reversal underscores the volatility of the crypto space and highlights broader macroeconomic concerns that continue to shape investor sentiment.

Trump’s Crypto Strategic Reserve Announcement: What Happened?

On Sunday, Trump announced that the U.S. government would include ADA, XRP, and SOL in its Crypto Strategic Reserve alongside Bitcoin (BTC) and Ethereum (ETH). This ignited market-wide excitement, with traders and analysts speculating that the move would lend legitimacy to digital assets and accelerate institutional adoption. Within hours:

• ADA surged over 60%

• XRP gained 33%

• SOL climbed 22%

• Bitcoin briefly spiked to $92,000, touching new all-time highs

However, by Tuesday, the excitement turned to panic. ADA, XRP, and SOL all suffered steep declines, erasing their previous gains. The selloff appeared to stem from a mix of profit-taking, investor uncertainty, and broader macroeconomic turmoil triggered by Trump’s concurrent tariff announcements on Canada, Mexico, and China.

Kevin Guo, director of HashKey Research, noted:

“Trump’s latest tariff decisions caused a massive selloff of crypto assets, completely reversing the previous day’s gains from the Crypto Strategic Reserve news.”

These tariffs—25% on Mexican and Canadian goods and a doubling of tariffs on Chinese imports to 20%—stoked fears of escalating trade tensions, sending shockwaves through global markets, including crypto.

Crypto’s Link to Traditional Finance: Why the Crash?

The downturn in crypto prices highlights its deepening connection to traditional financial markets. While many early adopters championed cryptocurrency as a hedge against economic downturns, digital assets are increasingly affected by broader financial trends.

• Bitcoin dropped 9%, falling to $84,000

• Ethereum plunged 12%, hitting $2,000, its lowest price since 2023

• Traditional stock markets also reflected turmoil, with the S&P 500 and NASDAQ declining in response to global economic uncertainties

With investors now looking for regulatory clarity, the upcoming White House Crypto Summit is a critical event that could shape the administration’s long-term vision for digital assets.

The Bitcoin-Only Debate: Should BTC Be the Sole Reserve Asset?

Not everyone is on board with Trump’s vision of a multi-crypto reserve. Some industry heavyweights, including Coinbase CEO Brian Armstrong and Gemini co-founder Tyler Winklevoss, have voiced their preference for a Bitcoin-only reserve.

Winklevoss argued:

“Only one digital asset in the world right now meets the bar, and that digital asset is Bitcoin.”

Bitcoin maximalists believe that while ADA, XRP, and SOL may be useful trading instruments, they lack the durability and store-of-value properties necessary for national reserves.

In contrast, executives from Cardano and Ripple defended their inclusion in the reserve. Charles Hoskinson, founder of Cardano, stated:

“XRP is great technology, a global standard, survived for a decade through many harsh cycles, and has one of the strongest communities.”

Ripple CEO Brad Garlinghouse also backed the multi-token approach, arguing that diversification strengthens the U.S.’s position in the evolving digital economy.

Massive Liquidations: How Traders Lost Over $863 Million

The wild swings in the market were particularly brutal for leveraged traders. Within 24 hours, over $863 million in liquidations occurred, affecting nearly 191,903 traders across various exchanges. The largest single liquidation—$15.49 million—took place on Binance’s BTCUSDT trading pair, demonstrating the risks of excessive leverage.

Breakdown of Liquidations:

• Total market liquidations: $863.08M

• Long positions liquidated: $298.66M

• Short positions liquidated: $547.17M

Liquidations by Cryptocurrency:

• Bitcoin (BTC) - $315.14M

  • Longs liquidated: $73.30M

  • Shorts liquidated: $241.84M

• Ethereum (ETH) - $160.23M

  • Longs liquidated: $73.98M

  • Shorts liquidated: $86.24M

• XRP (XRP) - $76.13M

  • Longs liquidated: $31.92M

  • Shorts liquidated: $44.21M

• Cardano (ADA) - $67.61M

  • Longs liquidated: $31.24M

  • Shorts liquidated: $36.38M

• Solana (SOL) - $62.48M

  • Longs liquidated: $24.71M

  • Shorts liquidated: $37.77M

These liquidations highlight the high-risk nature of leveraged crypto trading and the market’s extreme sensitivity to government announcements.

What’s Next? Will the Crypto Strategic Reserve Shape the Future?

The inclusion of digital assets in a U.S. reserve fund could signal a monumental shift in regulatory perception. Former CFTC Chairman Chris Giancarlo weighed in:

“If the U.S. seriously backs a digital asset reserve, it legitimizes crypto as a strategic financial tool. This would be a massive shift in regulatory perception.”

Meanwhile, crypto analyst Adam Cochran noted:

“The liquidation numbers show the market is still highly reactive to government policies. If Trump follows through with this initiative, we could see sustained bullish momentum.”

Some experts, like economist Raoul Pal, believe that if the U.S. begins accumulating digital assets, it could spur similar moves from other nations:

“A crypto reserve means the U.S. would be treating digital assets as part of its economic future. The question is—will this lead to further government accumulation?”

Final Thoughts: Crypto’s Unpredictable Future

The past week has demonstrated the immense power of government announcements over crypto markets. While Trump’s Crypto Strategic Reserve proposal initially sparked optimism, macroeconomic concerns and trade tensions triggered an equally dramatic downturn.

For now, all eyes remain on the upcoming White House Crypto Summit. Investors and analysts hope for clarity on the administration’s long-term vision for digital assets. Will this initiative lay the foundation for a policy-driven crypto boom, or will it merely fuel short-term speculation?

One thing remains certain—crypto’s journey is as unpredictable as ever. Traders and long-term investors alike must brace for continued volatility, recognizing that digital assets are no longer just a financial experiment but a battleground for global economic influence.