As noted in a CoinDesk analysis, the sharp reversal comes amid a cautious attitude among traders following Monday's market rally following the ambitious plan.
Updated Mar 4, 2025 7:53 AM UTC Published Mar 4, 2025 7:13 AM UTC Translated by IA
Oh, what do I know:
- Leading cryptocurrencies Cardano, Ripple and Solana all fell 21% on Tuesday, erasing gains made following a recent surge triggered by President Trump's announcement of a U.S. strategic cryptocurrency reserve.
- The initial enthusiasm that saw these tokens rise 60% proved short-lived due to profit taking and reduced risk appetite in the broader equity markets.
- The crypto market has also been impacted by Trump's announcements of tariffs on Canada, Mexico and China, with investors now expecting more clarity from the upcoming White House crypto summit.
Cardano's major tokens ADA, XRP, and Solana's SOL all fell sharply by 21% on Tuesday, just days after a sharp surge sparked by President Donald Trump's announcement of a U.S. strategic cryptocurrency reserve that erased any gains made during the initial hype.
As noted in a CoinDesk analysis, the sharp reversal comes amid a cautious attitude among traders following Monday's market rally following the ambitious plan.
Trump's announcement on Sunday that the reserve would include ADA, XRP, and SOL, along with Bitcoin (BTC) and Ethereum (ETH), sent the market into a frenzy, with ADA rising more than 60%, XRP up 33%, and SOL up 22% in a matter of hours.
The prospect of a state-owned cryptocurrency reserve was hailed as a game changer, with analysts predicting it could legitimize digital assets and accelerate their institutional adoption.
However, the rally proved short-lived amid profit-taking and a general weakening of risk appetite in broader equity markets.
“Trump’s recent announcements of tariffs on Canada, Mexico and China have triggered a massive sell-off in crypto assets, completely erasing the previous day’s gains in crypto strategic reserves,” Kevin Goh, director of HashKey Research, said in a Telegram message.
“Despite numerous cryptocurrency deregulation initiatives and supportive policies, investors view cryptocurrencies as risky assets that are highly dependent on the performance of the US stock market.”
China announced a 15% tariff on various goods on Tuesday after Trump doubled the tariff on Chinese imports to 20%. The US president also confirmed that a 25% tariff on goods from Mexico and Canada would go into effect on Tuesday.
Bitcoin has fallen 9% in the past 24 hours amid macroeconomic instability, trading at $84,000 during Asian afternoon hours. Ether has lost 12% and is trading just above $2,000, its lowest since 2023.
With a White House summit on cryptocurrencies scheduled for Friday, investors are now bracing for more clarity — or further instability — depending on what is discussed at the talks.
