Bitcoin’s price took a sharp dive on Monday, dropping nearly 10% to $85,321.69, as uncertainty surrounding U.S. President Donald Trump’s proposed national cryptocurrency reserve spooked investors. The broader cryptocurrency market also suffered heavy losses, with major altcoins like Ethereum, XRP, Cardano, and Solana tumbling by up to 20%.
Market Volatility Following Trump’s Crypto Plans
Initially, the market surged following Trump’s statement about creating a national strategic cryptocurrency reserve. The announcement sent Bitcoin soaring by 20% from its November lows, as traders reacted to the potential inclusion of Bitcoin, Ether, XRP, Solana, and Cardano in the reserve.
However, skepticism over the feasibility of the plan, combined with broader economic concerns, quickly reversed the gains. Late in the day, Bitcoin was down nearly 10%, while Ethereum dropped more than 15%. XRP, Cardano, and Solana saw even steeper declines, each losing around 20% of their value.
Investors De-Risking Amid Economic Uncertainty
“Everything is getting sold. There’s a de-risking unfolding among crypto investors,” said Adam Button, a manager at Forexlive. The sell-off comes amid fears of rising trade tensions, particularly after Trump announced a 25% tariff on all imports from Mexico and Canada, both of which have vowed to retaliate.
The downturn in crypto prices also reflects lingering doubts about Trump’s commitment to supporting digital assets. While his administration has signaled a more pro-crypto stance compared to his first term, market participants remain cautious about regulatory and economic challenges ahead.
Looking Ahead
Despite the pullback, Bitcoin’s total market valuation remains above a trillion dollars, maintaining its dominant position in the crypto space. Analysts suggest that investors will closely watch upcoming policy decisions, including further details about the proposed reserve, before making any major moves in the market.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should consult certified financial professionals before making investment decisions.