Trump’s Crypto Reserve Plan Backfires? Market Collapses, XRP Down 18%!

The crypto market surged when Donald Trump announced plans for a national crypto reserve, including Bitcoin and altcoins. However, doubts emerged over whether Congress would approve the Trump crypto reserve and how realistic it was. Some believed Trump’s coin choices were based on personal ties rather than actual market relevance. As enthusiasm dwindled, the market gave up its gains, with ADA and XRP suffering heavily. As such, excitement has turned into caution as traders questioned the long-term impact of Trump’s proposal.

Altcoins in U.S. Reserve? Investors Remain Skeptical

On the weekend, the market experienced a bullish movement as the Trump crypto reserve was announced. He stated that instead of only BTC, this reserve will contain SOL, ADA, XRP, and Ethereum. The excitement wore off after the weekend, the prices started to lose their gains, and many showed doubts about Trump’s reserve. This is because it does not look like that the Congress would pass this plan into law.

Additionally, a national Bitcoin reserve is more feasible because the government already has BTC from legal cases and seizures. But for an altcoin reserve to be created, congress needs to approve every purchase. Even with the current republican majority, many believe this will be impossible, as even some Republicans will be skeptical. As such, some community members showed their skepticism. Arthur Hayes, formerly known as BitMEX CEO, stated that without congressional approval or gold price revaluation, this reserve seems unlikely. 

The Hidden Agenda Behind Trump’s Crypto Selections

There are also theories that Trump’s selection of coins for the national crypto reserve is based on personal favor. This is because the companies behind XRP and ADA have both contributed to Trump’s administration. Furthermore, Solana is also personally tied to Trump as it hosts his $TRUMP memecoin. So, some believe these coins were not selected because of their American origin but because of personal ties.

Such theories seem even more logical as we analyze the market data and take a detailed look at these tokens. Adding Ethereum and Solana to the American Crypto Reserve can be justified by their immense role in the market. These blockchains are the main platform for growing crypto innovations and developers. As such, in comparison to these, ADA and XRP do not feel like justified choices.

Bearish Signals: XRP and ADA Plunge After Initial Surge

With such doubts, many have speculated that this announcement was just a stunt to change the crypto market’s bearish trend. Although this post seemed to have succeeded in doing so, most of the gains have been wiped out. This is visible in Cardano and XRP price decline, which was 23% and 18,% respectively, signaling a bearish market again. 

Provided by CryptoQuant- Published on Tradingview- March 4, 2025.

There are also some indicators that add to the bearish trend for XRP price decline. As highlighted in Chart 1 by Ki-Young Ju, the founder of CryptoQuant, XRP, seems to be heading into a distribution phase. The distribution phase happens when large investors begin to sell near a peak in price to secure their gains. As highlighted in the volume bubble map provided, the whale activity has been spiking between the $2 and $3 price points. 

Will Trump’s Crypto Reserve Survive?

Trump’s proposed crypto reserve has caused uncertainty, keeping the market tense. As such, traders are staying alert and tracking political developments. If the proposal fails, Bitcoin may stay dominant as the primary government-backed asset. Meanwhile, altcoins could struggle to sustain their value. In the short term, market volatility will persist, with XRP and ADA facing additional pressure as doubts further impact prices. However, the increasing institutional interest and reduced regulatory hurdles will support the long-term adoption of altcoins, even without governmental backing.