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XRP, DOGE, ADA Slump 9% as Trump Douses Bullish Crypto Reserve Hopes
Traders are disappointed the crypto reserve plans won’t add any buying pressure to the market, at least in the near term, with few catalysts to buoy the market.
Updated Mar 7, 2025, 9:18 a.m. Published Mar 7, 2025, 7:21 a.m.
What to know:
- Major cryptocurrencies including XRP, DOGE, and ADA saw a drop of up to 9% after President Trump's decision to establish a Bitcoin Strategic Reserve, excluding these tokens.
- The decision led to over $400 million in liquidations on bullish bets in crypto futures, primarily from BTC-tracked products.
- Traders are now focusing on the upcoming White House Crypto Summit, though expectations are low due to the lack of substantial promises from Trump.
Major tokens XRP, and plummeted as much as 9% in the past 24 hours after President Donald Trump dashed hopes of a diversified U.S. strategic crypto reserve.
Late Thursday, Trump directed his administration to establish a Bitcoin Strategic Reserve to hold bitcoin previously seized by the government with an additional “crypto stockpile” of other assets. Assets for the non-bitcoin stockpile will be any crypto that the government otherwise seizes.
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That reversed days of bullish momentum fueled by Trump’s earlier comments at including tokens XRP, ADA, ether and Solana’s SOL — dousing hopes of buying pressure on all these assets using taxpayer money.
DOGE spiked as much as 12% earlier in the week as NYSE Arca filed a 19b-4 with the SEC for approval of Bitwise's DOGE exchange-traded fund (ETF), with isolated hopes of it being included in the strategic reserve among some traders.
Bitcoin, the centerpiece of Trump’s plan, wasn’t immune, dipping 4.5% from a 24-hour high above $93,000 to under $88,000. The broad-based CoinDesk 20 (CD20), a liquid index tracking the largest tokens by market capitalization, fell 5%, while smaller altcoins dropped as much as 10%.
The slide triggered over $400 million in liquidations on bullish bets in crypto futures, with a bulk of that stemming from BTC-tracked products at $230 million.
Traders now look to the White House Crypto Summit scheduled in U.S. morning hours on Mar.7, but don’t hold high hopes for what’s to come.
“Traders have lowered expectations since the strategic reserve announcement failed to live up to expectations,” Nick Ruck, director at LVRG Research, told CoinDesk in a Telegram message. “Trump hasn't promised anything substantial for Friday's summit that could reverse the impact of the trade wars, so there is still a risk-off sentiment.
“Traders hold some hope for surprise announcements between Trump and individual blockchain companies, as numerous industry leaders and key government department heads will be in attendance,” Ruck added.
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Coinbase Sees Crypto Recovery Ahead as Liquidity Improves and Fed Rate Cut Odds Climb
The crypto exchange also took note of a so-called AI bubble that continues to go strong and a weaker U.S. dollar.
What to know:
- Coinbase Institutional is seeing a potential December recovery in crypto, citing improving liquidity and a shift in macroeconomic conditions that could favor risk assets like bitcoin.
- The firm's optimism is driven by rising odds of Federal Reserve rate cuts, with markets pricing in a 93% chance easing next week, and improving liquidity conditions.
- Several recent institutional developments, including Vanguard's crypto ETF policy reversal and Bank of America's greenlighting of crypto allocations, have contributed to bitcoin's rebound from recent lows.
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