Crypto market crashes, erasing $500 billion of market cap

The crypto national strategic reserve announcement this weekend helped revive the crypto market, but the boost was extremely short-lived. This morning, the entire crypto market is crashing alongside the broader markets as President Trump’s tariffs went into effect.

“This latest crypto sell-off is a mix of policy uncertainty and macro pressures hitting all at once,” Sid Powell, CEO and cofounder of Maple, told Sherwood News. “The initial hype around the US crypto strategic reserve quickly turned into skepticism — markets don’t like unanswered questions, and there are plenty around how this would work.” 

“Crypto markets are now worth -$100 billion LESS than they were prior to the US Crypto Reserve announcement,” The Kobeissi Letter posted on X:

As of Tuesday morning, not even 48 hours after the reserve announcement, crypto’s market cap stood at $2.8 trillion, down 12.4% in the past 24 hours, according to CoinGecko.  

Following Trump’s Sunday post, bitcoin shot to about $94,000 from about $85,000, but now it’s even lower, at $82,000, down more than 8% in the past 24 hours.  

On Sunday, Trump announced that the much-anticipated bitcoin strategic national reserve (which he touted during his campaign) would include a slew of altcoins, including XRP, Solana, and cardano. This change in plans has angered bitcoin purists who argue that it’s the sole valid asset the reserve should include.

Responses came fast and furious, including from Trump supporters like the Winklevoss brothers and Anthony Pompliano, who said, “We were promised a Strategic Bitcoin Reserve, not a smattering of altcoins.”

Tyler Winklevoss, who said he doesn’t have anything against altcoins, added, “Only one digital asset in the world right now meets the bar and that digital asset is bitcoin.”

There were no details in Trump’s post on how the government would implement this reserve, nor who would custody the funds. 

“The lack of information on the amount of crypto the US government will buy, and how the purchase will be funded, coupled with fears of a market retreat if expectation does not meet reality, means that the likelihood of high volatility in the crypto markets will continue,” Deutsche Bank analyst Marion Laboure wrote in a note.

The reserve disappointment’s pressure on price is compounded by Trump’s tariffs, which are rattling global markets. 

Jeff Feng, cofounder of Sei Labs, told Sherwood that tariffs have also contributed to the decline in market sentiment as more traditional investors view bitcoin as a risky asset rather than the safe haven it was intended to be. 

“Since January 1, gold prices have risen 10% while BTC has declined 10%, indicating that investors don’t see the same risk profile between the two assets,” Feng said.

Feng added that one thing that could turn this around is if more clarity and details emerge during the White House crypto summit this Friday.