Bitcoin tumbled nearly 10% on Monday, falling to $85,321.69, as investor concerns over trade tensions and uncertainty surrounding the U.S. strategic crypto reserve fund triggered a sell-off across the market.
Despite an initial surge following Donald Trump’s announcement of a U.S. national cryptocurrency reserve, market sentiment quickly turned bearish amid doubts about the plan’s feasibility. The broader crypto market experienced significant losses, with Ethereum (ETH) dropping over 15% and major altcoins like XRP, Cardano (ADA), and Solana (SOL) declining nearly 20%.
Crypto Market Faces De-Risking Amid Uncertainty
“Everything is getting sold. There’s a de-risking event unfolding among crypto investors,” said Adam Button, manager at Forexlive.
While Bitcoin continues to dominate the $1 trillion crypto market, investor confidence has been shaken by macroeconomic concerns and regulatory uncertainties surrounding Trump’s proposed digital asset reserve.
Trump’s Strategic Crypto Reserve: The Hype vs. Reality
Trump’s executive order on digital assets, issued in January 2025, outlined plans to establish a U.S. cryptocurrency reserve consisting of Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA)—a move aimed at strengthening America’s foothold in digital assets.
He emphasized that Bitcoin and Ethereum would be central to this reserve, sparking initial optimism. Following Trump’s Sunday post, Bitcoin surged 20% from its November lows, driven by expectations of a pro-crypto stance from the administration.
However, skepticism grew after Trump simultaneously announced a 25% tariff on all imports from Mexico and Canada, prompting fears of a retaliatory trade war that could slow U.S. economic growth.
Market Outlook: Will Crypto Recover?
Despite the market downturn, Trump’s strategic reserve proposal has reignited interest in digital assets, particularly after months of regulatory uncertainty.
Bitcoin saw its steepest monthly decline since June 2022, dropping over 17% in February, with losses totaling more than one-third of its value since peaking at $105,000 in early January.
However, the long-term outlook remains uncertain. Many investors had bet on Trump’s presidency bringing regulatory relief, following years of strict oversight under Joe Biden. Whether this sell-off marks a temporary correction or a deeper downturn will depend on regulatory clarity and macroeconomic developments in the coming weeks.
Final Thoughts
The cryptocurrency market remains highly volatile, with political and economic factors playing a crucial role in price movements. While Trump’s pledge for a national crypto reserve has sparked renewed enthusiasm, concerns over trade policies and implementation hurdles are weighing on market sentiment.
As always, investors should conduct thorough research and consult certified financial professionals before making investment decisions.
