Major cryptocurrencies suffered a sharp correction on Tuesday, wiping out recent gains spurred by President Trump’s announcement of a U.S. crypto strategic reserve. Cardano’s ADA, Ripple’s XRP, and Solana’s SOL led the downturn with a 21% plunge, erasing the euphoria from the previous surge.
The initial market reaction to Trump’s Sunday declaration had been overwhelmingly positive. The announcement that the reserve would include ADA, XRP, and SOL alongside Bitcoin and Ethereum triggered a frenzy, sending ADA up over 60%, XRP climbing 33%, and SOL jumping 22% within hours. Analysts had hailed the move as a potential game-changer for crypto legitimacy and institutional adoption.
However, the optimism was short-lived as profit-taking and a risk-averse sentiment in broader markets took hold. The situation was exacerbated by Trump’s tariff announcements targeting Canada, Mexico, and China. “Trump’s latest tariff announcements caused a massive selloff of crypto assets, completely reversing the previous day’s crypto strategic reserve gains,” noted Kevin Guo, director of HashKey Research.
The escalating trade tensions prompted a broader market retreat. China responded with a 15% tariff on various imports, which Trump countered by doubling tariffs on Chinese imports to 20%. Additionally, 25% tariffs on goods from Mexico and Canada came into effect.
The crypto market capitulated under the weight of macroeconomic uncertainty. Bitcoin slid 9% to $84,000, while Ethereum suffered a 12% decline, trading just above $2,000 – its lowest level since 2023.
As investors brace for further market movements, all eyes are on the upcoming White House Crypto Summit scheduled for Friday. The event is expected to provide clarity – or potentially more volatility – depending on the outcomes of the discussions.
